Financial Data and Key Metrics Changes - In Q4 2025, net sales decreased by 20.6% to $87.7 million compared to $110.5 million in Q4 2024 [13] - Full-year net sales were down 6.7%, totaling $368.3 million in 2025 versus $394.9 million in 2024 [13] - Adjusted non-GAAP profit for Q4 2025 was $26.1 million, or 29.7% of sales, up from 28.4% in Q4 2024 [15] - Full-year adjusted non-GAAP net income was $4.2 million, or $0.31 per share, compared to a loss of $0.6 million, or $0.05 per share in 2024 [19] Business Line Data and Key Metrics Changes - Connected Home sales increased by $17.1 million, or 15.8%, to $125.4 million for the full year, driven by new orders in climate control and HVAC [14] - Home entertainment sales decreased by $43.7 million, or 15.2%, to $242.9 million for the full year [15] - Q4 2025 home entertainment sales were down 23.8% to $58 million, reflecting lower demand for subscription broadcasting products [15] Market Data and Key Metrics Changes - The company noted a slowdown in the connected home market, which began in the second half of 2025, due to industry consolidation and economic pressures in Europe [8] - Customer forecasts and orders indicated that revenue inflection in the connected home segment would take longer than expected [9] Company Strategy and Development Direction - The company is focused on restructuring to align with the revenue and margin profile expected for 2026, including a reduction in force and cost reductions across various areas [10] - The strategy includes optimizing R&D and portfolio focus on high-revenue and margin opportunities [10] - The company aims to improve operational efficiency, strengthen profitability, and generate more free cash flow as part of its long-term strategy [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the home entertainment business and the slower-than-expected growth in the connected home segment [6] - The company is adopting a conservative outlook for 2026, expecting a decline in revenue due to market headwinds [20] - Management emphasized the importance of maintaining operational discipline and focusing on profitability amid ongoing economic uncertainties [8] Other Important Information - The company achieved a positive net cash position for the first time since 2021, with a net cash balance of $8.2 million [19] - Significant cost-saving measures were implemented, including reducing manufacturing footprint and overhead, which contributed to improved operating leverage [16] Q&A Session Summary Question: Guidance on revenue decline for 2026 - Management could not provide specific decline percentages but emphasized a focus on improving cash flow and profits [24] Question: Details on expense reductions - Management indicated that operating expenses would be significantly reduced in alignment with revenue adjustments [25] Question: Size of the reduction in force (RIF) in Q4 - The RIF in Q4 involved approximately 50 employees [26] Question: Major customers in Q4 - Major customers included Daikin at close to 16% and Comcast at close to 11% of sales [30] Question: Licensing revenue sources - Licensing revenue in Q4 was primarily from the traditional home entertainment business, with plans to expand in the connected home segment [31]

Financial Data and Key Metrics Changes - For Q4 2025, total revenue was $123.5 million, up from $114.3 million in Q4 2024, representing an increase of 10.5% [29] - Company-operated restaurant revenue increased by 7.1% to $102.4 million from $95.6 million in the same period last year [29] - Adjusted EBITDA for Q4 2025 was $16.9 million compared to $14.3 million in Q4 2024 [36] - GAAP net income for Q4 was $6.5 million or $0.22 per diluted share, compared to $6 million or $0.20 per diluted share in the prior year [35] Business Line Data and Key Metrics Changes - Franchise revenue increased by 15.5% to $13 million during Q4, driven by a 3.2% increase in comparable restaurant sales [30] - The growth in comparable restaurant sales included a 2.7% increase in average check size, partially offset by a 2.3% decrease in transactions [30] Market Data and Key Metrics Changes - System-wide comparable store sales for the first quarter of 2026 increased by 2.4%, consisting of a 1.8% increase in company-operated restaurants and a 2.8% increase in franchise restaurants [31] Company Strategy and Development Direction - The company aims to drive sustainable traffic growth while maintaining margin discipline and unit economic improvements achieved over the past two years [6] - The focus is on a five-pillar strategy that includes culinary innovation, operational excellence, and digital engagement to strengthen the brand's position [7][14] - The company plans to open approximately 18-20 new restaurants in 2026, with a significant portion outside California [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the consumer's demand for quality food at a good value, noting that consumers are increasingly budget-conscious [42] - The company is optimistic about its growth trajectory, supported by a healthy pipeline of franchise partners and operational improvements [56][58] Other Important Information - The company completed 69 planned remodels in 2025 and plans to remodel 25-35 company-operated restaurants in 2026 [26] - The company has made substantial technology investments, including upgrading to a cloud-enabled point of sale platform [23] Q&A Session Summary Question: What is the underlying demand in the current consumer environment? - Management noted that consumers are looking for great food at a great value and are increasingly budget-conscious, responding positively to value-driven offerings [42] Question: How is the company managing menu innovation and marketing? - The company is pacing and sequencing its menu innovations thoughtfully, ensuring that new items replace older ones to manage complexity [46][47] Question: What is the mix of growth between existing franchisees and new partners? - Management indicated a healthy mix of growth from existing franchise partners and new partners, with a focus on expanding the franchise pipeline [56] Question: What gives the company confidence in its multi-year guidance? - The company has stabilized and improved margins and profitability, allowing for longer-term planning and investment in growth initiatives [58] Question: What is the plan for managing debt and cash flow? - The company plans to invest cash flow into business growth while evaluating potential returns to shareholders in the future [73]

Financial Data and Key Metrics Changes - Consolidated revenue for 2025 was $493 million, a 3% increase from $480 million in 2024 [19] - Gross margin improved to 7% of revenue, up from a negative 12% in 2024, reflecting a $90 million increase in total gross margin [19][16] - Adjusted EBITDA for 2025 was $5 million, a significant improvement from a negative $61 million in 2024 [20] Business Line Data and Key Metrics Changes - Revenue from Shimmick projects was $395 million, a 12% increase year-over-year, representing 75% of total revenue [2] - Non-core project revenue decreased to $96 million from $125 million in 2024, indicating a focus on winding down low-margin projects [19][3] - Gross margin for Shimmick projects was 10%, a 400 basis point improvement over the previous year [3] Market Data and Key Metrics Changes - Backlog grew to $793 million, with a book-to-burn ratio of 1.4 times, indicating strong demand and project wins [18][5] - The company expects a robust pipeline with $600 million to $1 billion in bidding volumes per month [6][4] - New awards booked during Q4 2025 were $135 million, a sequential increase from Q3 2025 [18] Company Strategy and Development Direction - The company is focused on three strategic pillars: growing the top line, winding down legacy low-margin projects, and driving operational improvements [2][23] - Emphasis on collaborative delivery methods, such as progressive design-build and construction manager/general contractor, to enhance project execution and margins [8][9] - The company aims to position itself as a top infrastructure provider by aligning project selection with core strengths and market opportunities [25][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, projecting revenue growth between 12% and 22%, with adjusted EBITDA expected to increase significantly [22] - The market remains healthy, with strong demand in core sectors such as water and electrical construction, particularly in California and Texas [34][4] - Management highlighted improvements in operational efficiency and talent retention as key factors for future success [11][12] Other Important Information - The company ended 2025 with total liquidity of $44 million, consisting of $20 million in cash and $24 million available under credit agreements [18] - The company is actively pursuing opportunities in the data center market, which is expected to contribute significantly to future revenue [9] Q&A Session Summary Question: How will gross margins be impacted by new project awards? - Management expects gross margins to increase, influenced by the mix of projects, with a focus on maintaining efficient SG&A expenses [30][31] Question: What is the outlook for backlog and overall spending in key markets? - Management indicated strong visibility in California and Texas, with no shortage of opportunities expected in the next 12-24 months [34][35] Question: What is the guidance for 2026, particularly regarding non-core revenue? - Management anticipates burning through most non-core work, which currently represents about 11% of the backlog, with minimal impact on overall margins [43][44] Question: Can you provide more details on the electrical infrastructure projects? - The electrical business is seeing strong bidding activity, with projects ranging from $5 million to $200 million, particularly in Texas and California [46][47] Question: How is the company managing the completion of legacy non-core projects? - Management reported that only two non-core projects remain active, with a focus on wrapping them up efficiently this year [48][49]

Financial Data and Key Metrics Changes - For fiscal 2025, net sales increased by 9.7% to $12.4 billion, with operating income at $1.5 billion, representing 12.4% of sales, and diluted EPS increased by 1.2% to $25.64 [4][31][32] - In Q4, net sales rose by 11.8% to $3.9 billion compared to $3.5 billion last year, with comparable sales increasing by 5.8% [24][25] Business Line Data and Key Metrics Changes - The skincare and wellness category accounted for 24% of sales, while the makeup category decreased to 35% due to the impact of Space NK [26] - Fragrance was the strongest performing category with double-digit comp growth, driven by new products from established brands and exclusive brands [26][28] - Haircare achieved high single-digit comp growth, primarily from new brands like Amika and Moroccanoil [27][28] Market Data and Key Metrics Changes - The company gained market share in both mass and prestige beauty categories, with a 5.4% increase in comparable sales for the year [15][31] - The loyalty program grew by 5% to a record 46.7 million active members, indicating strong retention and reactivation of existing members [15] Company Strategy and Development Direction - The Ulta Beauty Unleashed strategy focuses on driving core business growth, scaling new businesses, and realigning the foundation for future growth [8][18] - Plans for 2026 include enhancing brand-building efforts, expanding international presence, and investing in digital capabilities [19][20] Management's Comments on Operating Environment and Future Outlook - Management noted continued resilience in consumer behavior, with a focus on value and affordability, while being cautious of rising global conflicts impacting economic conditions [16][17] - The beauty category is expected to grow in the 2%-4% range, aligning with historical growth rates [17] Other Important Information - The company plans to invest between $400 million and $450 million in capital expenditures for store expansion and digital capabilities [37] - The new distribution center in the Northwest is expected to be operational by 2027, with costs included in the current CapEx plan [75] Q&A Session Summary Question: Composition of comparable sales and pricing dynamics - Management indicated that pricing increases typically affect 10%-15% of the assortment and they are planning for a normalized pricing environment in fiscal 2026 [40][41] Question: SG&A expenses and marketing investments - SG&A increased due to higher incentive compensation and investments in marketing to support growth, with a focus on personalization [42][44] Question: Industry growth outlook and geopolitical factors - Management acknowledged that the 2.5%-3.5% comp guidance reflects a normalization and is cautious about consumer demand due to macro pressures [50][51] Question: Early response to new product launches - The launch of Rare Beauty was strong, contributing positively to makeup sales, but it is one of many brands in the assortment [54][58] Question: Competitive environment and maintaining market share - The company emphasized its broad assortment from low to luxe and its loyalty program as key differentiators in a competitive beauty market [61][62]

Financial Data and Key Metrics Changes - Revenue for the full year 2025 was $237.3 million, a significant increase from $28.7 million in 2024, primarily driven by government contracts and the Dynavax collaboration [20] - Cash equivalents and investments at the end of the fourth quarter were $63.8 million, with an expected cash runway into the second quarter of 2027 [20][21] Business Line Data and Key Metrics Changes - The partnership with Dynavax for the oral COVID-19 vaccine candidate included a $25 million upfront payment and a $5 million equity investment, validating the oral vaccine platform [5][6] - The oral norovirus vaccine candidate showed promising results in a clinical study, with significant increases in IgA levels in both serum and breast milk [14][15][17] Market Data and Key Metrics Changes - The COVID-19 vaccine trial is currently in phase 2B, with a focus on comparing the oral vaccine's efficacy against an mRNA vaccine [9][10] - The need for next-generation solutions in COVID-19 vaccination remains critical as the pandemic continues to impact global health [11] Company Strategy and Development Direction - The company aims to manage financial resources effectively, pursuing strategic partnerships and reducing operating costs to focus on advancing lead programs [7][21] - The oral pill vaccine platform is viewed as a disruptive technology that could address public health challenges and changing vaccination preferences [24] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the potential of the COVID-19 and norovirus oral vaccine programs to provide public health benefits and create shareholder value [22] - The company plans to report top-line results from the COVID-19 trial's sentinel cohort in early Q2 2026 and from the KP2 cohort in Q4 2026 [23] Other Important Information - A lease termination agreement was entered into to reduce operating expenses, allowing for a more focused allocation of financial resources [5][8] - The company is exploring licensing or partnership opportunities for earlier-stage assets, including seasonal and pandemic flu candidates and the HPV program [24] Q&A Session Summary Question: Delay in 400-person sentinel cohort data - Management acknowledged a slight delay in reporting the 400-person sentinel cohort data, now expected in early Q2 instead of late Q1, due to interactions with BARDA [27][28] Question: Next steps after sentinel data - The decision points for next steps will involve both BARDA and Dynavax, with Vaxart overseeing the Phase 2B trial [36][37] Question: Immunogenicity data availability - Immunogenicity data will not be included in the Q2 update but will follow after the initial safety data [36][39] Question: Regulatory input on norovirus candidate - Discussions with the FDA have occurred regarding the primary endpoint of safety for the next phase 2 study of the norovirus candidate [42][43]

Financial Data and Key Metrics Changes - For the full year 2025, the net loss was $21 million or $0.62 per share, while the fourth quarter net loss was $5.3 million or $0.15 per share, aligning with expectations [28] - Net cash used in operating activities was less than $14 million for the full year and just $2.9 million for the fourth quarter, representing a 3% decrease year-over-year and a 30% decrease compared to the same quarter last year [28][29] - Cash and cash equivalents totaled $4.4 million at December 31, 2025, with access to capital markets remaining strong [29] Business Line Data and Key Metrics Changes - HeartBeam's core technology includes a portable cable-free ECG that synthesizes a 12-lead ECG, with FDA 510(k) clearance achieved for arrhythmia assessment [5][6] - The company is launching a second form factor, an on-demand 12-lead extended wear patch, which is expected to disrupt the $2 billion ambulatory cardiac monitoring market [8][20] - The initial commercial launch is focused on concierge and preventive cardiology practices, targeting a price per patient of $500-$1,000 per year [11][12] Market Data and Key Metrics Changes - The target market includes approximately 1.5 million Americans currently paying for concierge medicine, with a focus on high-net-worth individuals who show a strong willingness to adopt advanced health technology [11][12] - The company aims to capture a small portion of the concierge market initially, with plans to expand into larger patient segments, including direct primary care practices and telehealth networks [12][13] Company Strategy and Development Direction - HeartBeam's strategy involves a staged approach to commercialization, starting with a limited launch in concierge cardiology and executive health [13][16] - The company plans to validate its model in a concentrated market before scaling, with a focus on deep adoption within initial practices [12][16] - The collaboration with Mount Sinai aims to enhance AI capabilities and bring advanced algorithms to the HeartBeam device [25][98] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for the HeartBeam system, highlighting the strong interest from both patients and physicians [10][11] - The company anticipates significant advancements in 2026, with ongoing studies and product launches expected to drive growth [32][34] - The management emphasized maintaining financial discipline while advancing key milestones and developing the R&D pipeline [28][29] Other Important Information - The HeartBeam 12-lead patch is expected to provide better diagnostic capabilities and integrate into existing workflows, leveraging existing reimbursement [20][21] - The company has completed a working prototype of the patch and is conducting clinical studies to validate its effectiveness [23][26] Q&A Session Summary Question: Can you talk about the timeline for the ALIGN pilot study and the patch initiatives? - Management indicated that the ALIGN-ACS pilot study is expected to enroll quickly due to its design, with completion anticipated by the end of Q3 2026 [36][39] Question: What does the account pipeline look like for the commercialization strategy? - The focus is on a limited number of anchor accounts initially, with plans to validate the premium value proposition before scaling [41][43] Question: How should we think about R&D expenses trending in the upcoming quarters? - R&D expenses are expected to step up slightly in the first half of the year due to clinical trials, then return to baseline levels [49][51] Question: Can you provide details on the Mount Sinai relationship and potential for similar alliances? - The relationship with Mount Sinai was built on mutual respect and shared goals in advancing AI algorithms for ECG data, with openness to future partnerships [96][98]

Financial Data and Key Metrics Changes - SentinelOne achieved a significant milestone by surpassing $1 billion in revenue, growing 22% year-over-year, and delivered full-year operating profitability with an operating margin of 3.5% [5][27] - In Q4, revenue grew 20% year-over-year to $271 million, with total ARR increasing by 22% and a record addition of $64 million in net new ARR [27][28] - The company maintained a solid gross margin of 78% in Q4, with an operating margin of 6%, representing a 450 basis point year-over-year improvement [29][30] Business Line Data and Key Metrics Changes - Non-endpoint solutions surpassed half of total annual bookings, indicating strong adoption of the Singularity Platform across diverse categories [7] - The attach rate of the Purple AI solution reached over 50% on licenses sold in Q4, demonstrating its growing importance in customer operations [9] - ARR from data solutions surpassed $130 million, with significant growth in demand for AI SIEM and new AI-native Data Security Posture Management solutions [11][12] Market Data and Key Metrics Changes - International markets grew 30% and represented 40% of total revenue, reflecting strong global demand [28] - The percentage of enterprise customers using three or more solutions increased to 65%, while those using four or more solutions more than doubled to 42% [8] - The company saw strong expansion in cloud security solutions, surpassing $160 million in ARR, driven by increasing demand for robust security in expanding cloud environments [14] Company Strategy and Development Direction - SentinelOne is focused on becoming a leader in AI-native security, capitalizing on a market opportunity exceeding $100 billion [6] - The company aims to achieve the Rule of 40 by balancing durable growth with higher profitability, emphasizing operational efficiencies and strategic partnerships [5][32] - The introduction of the Wayfinder threat services and the Claw Security suite reflects the company's commitment to innovation and addressing emerging cybersecurity challenges [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong demand for AI security solutions as a key driver [22][23] - The evolving macroeconomic environment and geopolitical uncertainties are acknowledged as factors that could influence deal timing and sales cycles [32] - The company is optimistic about improving net new ARR and maintaining strong retention rates, with a focus on optimizing sales productivity [41][60] Other Important Information - The company ended the fiscal year with $770 million in cash equivalents and no debt, allowing for opportunistic share repurchases [30] - A new CFO, Sonali Parekh, has been appointed to lead the next phase of SentinelOne's financial strategy, focusing on durable growth and operational efficiency [25][36] Q&A Session Summary Question: Dynamics around growth and partner-led deals - Management noted that the record net new ARR growth reflects solid demand and execution consistency, with no significant change in the balance between partner-led and end customer deals [39][40] Question: Clarification on profit margins - Management explained that free cash flow can be lumpy due to the timing of larger deals, but overall cash collection has improved significantly [44][45] Question: Adoption of new products and NRR trends - Management emphasized that the stable NRR indicates successful new logo business and significant future expansion opportunities within the existing customer base [47][48] Question: Update on endpoint security and competitive landscape - Endpoint security remains a strong growth driver, with double-digit growth and increasing share, particularly in the context of generative AI [51][52] Question: Priorities for the new CFO - The new CFO will focus on durable growth, optimizing go-to-market strategies, and balancing resource allocation to capitalize on emerging growth opportunities [55][56] Question: Drivers of expected improvement in new ARR - Management highlighted a shift towards a more balanced revenue seasonality and traction in endpoint security as key drivers for improved new ARR [59][60] Question: Sustainability of growth in data solutions - Management expressed confidence in the continued growth of data solutions, driven by increasing demand for data lake capabilities and expansion opportunities [80]

Financial Data and Key Metrics Changes - For Q4 2025, net sales were $273 million, up 9% compared to Q3, exceeding expectations [25] - Gross margin was at 41%, slightly higher than guidance, marking the seventh of the last eight quarters above 40% [25] - SG&A expenses decreased by 12% year-over-year to $91 million [26] - Adjusted EBITDA for Q4 was $23 million, at the high end of expectations [26] - For 2026, net sales are expected to be flat to up 3% compared to 2025, with adjusted EBITDA projected between $70 million and $80 million [27] Business Line Data and Key Metrics Changes - Funko core product lines are expected to grow high single digits year-over-year, while Loungefly is projected to decline by double digits due to SKU cuts [27][28] - The Bitty Pop! product line has shown strong growth, contributing positively to sales [30] Market Data and Key Metrics Changes - In Europe, sales increased by 20% from January 2025 to January 2026, outperforming market growth [22] - The company is the second largest collectible brand by market share in Europe, following Pokémon [22] Company Strategy and Development Direction - The "Make Culture Pop!" strategy focuses on participating in cultural moments and expanding the brand's presence in collectibles [10] - The company aims to grow in Asia and Latin America, appointing a new Chief International Officer to drive this initiative [23] - Funko is exploring original content creation as a long-term growth driver, leveraging partnerships with major studios [35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, citing a strong entertainment slate and growth in collectibles, licensed IP, and the "kidult" market [32][33] - The company is confident in maintaining gross margins due to renewed licensing agreements and cost management strategies [29] Other Important Information - Funko launched a new program called HyperStrike to quickly design and manufacture products in response to cultural trends [15] - The company is expanding its product offerings, including a partnership with Rideback for new storytelling initiatives [21] Q&A Session Summary Question: Describe the shape of the flat to +3% guidance past Q1 - The growth is expected to be consistent throughout the year, with Q2 anticipated to show improvement over last year [34] Question: To what extent does Funko view original content creation as a growth driver? - Original content is seen as a potential long-term growth driver, with a focus on storytelling through partnerships with major studios [35] Question: Does Funko need to use any of its extended credit agreement in 2026? - The company does not expect to need additional borrowing and plans to manage operations with existing cash flows [37] Question: Can you break out the POS trends and inventory restocking domestically versus Europe? - Europe continues to see double-digit growth in POS sales, while the US has shown improving trends throughout Q4 [39] Question: What would you highlight as the key initiatives to drive top line results and margin versus 2025? - Key initiatives include a strong content slate, growth in Bitty Pop!, and international expansion [40]

Financial Data and Key Metrics Changes - Total revenue for Q3 2026 was $16.6 million, a decrease of approximately 3% compared to $17 million in the prior year period [11] - Core study revenue reached a record $16.6 million, representing growth of approximately 32% from $12.6 million in the year-ago period [11] - Adjusted EBITDA for the quarter was $575 thousand, marking the third consecutive quarter of positive adjusted EBITDA [13] - GAAP loss from operations for the quarter was approximately $275 thousand [13] - Gross margin for the quarter was 47%, down from 61% in the prior year period [13] Business Line Data and Key Metrics Changes - The core translational oncology services platform demonstrated strong performance, with record services revenue driven by effective study execution and conversion of previously booked work [4] - Data revenue was not recognized in Q3 2026, compared to $4.5 million in the prior year period, contributing to the overall year-over-year revenue decline [12] - Operating expenses increased to $7.2 million from $5.3 million in the prior year, reflecting investments in strategic priorities [14] Market Data and Key Metrics Changes - The company noted that quarterly revenue can fluctuate due to the timing of study progression and completion, with strong conversion of previously booked work benefiting revenue in the current period [5] - The underlying demand for services remains healthy, with a focus on expanding the pipeline of future work through increased commercial engagement [5] Company Strategy and Development Direction - The company is focused on balancing growth and investment while maintaining positive adjusted EBITDA, with expectations for more meaningful acceleration in fiscal 2027 and 2028 [6][10] - The data business is beginning to show early momentum, with new deals closed during the quarter and additional revenue expected in Q4 [4][7] - Corellia, the target discovery subsidiary, is generating attractive data and is in discussions for potential external funding, which could redirect investments towards other growth initiatives [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue growth and positive adjusted EBITDA while continuing to invest in the data business and Corellia [3][6] - The company is optimistic about the long-term potential of its data platform and therapeutic subsidiary, aiming to maximize shareholder value across all growth vectors [9] Other Important Information - The company ended the quarter with $7.1 million in cash and no debt, maintaining a cash balance within projected ranges [16] - The next earnings call is scheduled for July, where further updates on progress will be provided [18] Q&A Session Summary - There were no questions from participants during the Q&A session [17]

Financial Data and Key Metrics Changes - Total revenue for the second quarter was $8.3 million, up 18.3% from last year, marking the seasonally strongest quarter due to holidays [9] - Advertising revenue increased by 18.3% for the quarter, driven by strong growth in the Zedge Marketplace [10] - GAAP loss from operations was $2.9 million, compared to a loss of $2.2 million last year, with a GAAP net loss of $2.3 million and loss per share of $0.18 [12] - Non-GAAP net income was $0.8 million with an EPS of $0.06, compared to a loss of $0.2 million and a loss per share of $0.01 last year [12][13] - Cash strengthened to $19.1 million with zero debt, and free cash flow remained in the double digits [8][14] Business Line Data and Key Metrics Changes - Zedge Marketplace revenue was up over 21% year-over-year, driven by strong advertising and subscription revenue [9] - Zedge Plus subscription revenue increased by 33% year-over-year, with the net active subscriber base growing by 49% to nearly 1.2 million subscribers [10] - Deferred revenue reached $6 million, up 5% sequentially and 39% year-over-year, reflecting future revenue with a 100% gross margin [10] - GuruShots appears to be stabilizing, while DataSeeds.AI is expected to increase its contribution in the second half of fiscal 2026 [11] Market Data and Key Metrics Changes - The appetite for AI training data is described as virtually insatiable, with ongoing interest and larger orders from enterprise customers [5] - The company is focusing on multimodal data, including images, audio, and video, to expand its offerings [20] Company Strategy and Development Direction - The company aims to strengthen monetization in the marketplace, build DataSeeds deliberately, and expand its innovation pipeline in a disciplined manner [8] - The operational focus includes building a high-quality outbound pipeline and better qualifying inbound requests to ensure long-term credibility in the enterprise market [6] - The company is adopting a framework for product innovation that emphasizes rapid development and objective measurement of success [7] Management's Comments on Operating Environment and Future Outlook - Management noted that MAU contraction remains, but the focus is on acquiring higher value users and improving monetization efficiency [4] - The company is optimistic about the growth potential of DataSeeds.AI and is committed to making the right investments in this area [5] - Management acknowledged structural headwinds tied to the evolving field of search affecting Emojipedia, leading to a non-cash impairment this quarter [7] Other Important Information - The company generated solid free cash flow even after investing in innovation priorities, and it is now paying a quarterly dividend while repurchasing shares when market conditions are favorable [8] - The cost of revenue was 6.8% of revenue, up from 6.4% last year due to various factors including partner discounts and new licensing fees [11] Q&A Session Summary Question: Can you walk us through the DataSeeds pipeline and margin perspective? - Management explained that the progression of a deal depends on the success of proof of concept, with margins being attractive but variable based on deal type [17][18] Question: How are you thinking about multimodal data? - The company is focusing on images, audio, and video, with completed proof of concept on the video side and discussions on audio work [20] Question: Can you comment on the new alpha products launched? - Management stated that the new products are built on an evolving foundation, allowing for modular development and faster market entry [21][22] Question: What is driving the momentum in subscription revenues? - The ongoing investment in optimizing subscription offerings is attracting prospective subscribers [23] Question: What is driving the success of the Zedge Marketplace? - The fiscal Q2 coincides with year-end advertising spend, and efforts in data science are enhancing user segmentation and monetization [25][27] Question: How is the Tapedeck product progressing? - The company is focusing on expanding the music catalog to attract users, with ongoing product development slowing down [29][30] Question: How important is discovery for the success of Tapedeck? - Discovery is crucial, and the app recommends alternative artists and genres to users, while also promoting the app through artists' fan bases [31]