Financial Data and Key Metrics Changes - The company has not conducted traditional quarterly earnings calls recently due to an ongoing review of potential strategic alternatives [4] - The refinancing of the credit facility was completed, closing a $320 million secured credit facility, which replaced approximately $249 million of outstanding indebtedness [7][8] - The decision to suspend quarterly dividends is expected to preserve approximately $4.1 million in cash annually, which can be redeployed into leasing efforts [9] Business Line Data and Key Metrics Changes - General and administrative expenses (G&A) were reduced by approximately $1.5 million, or about 10%, declining from $13.9 million in 2024 to $12.4 million in 2025 [10] Market Data and Key Metrics Changes - National office transaction volume has declined from an average of $140-$150 billion per year to approximately $80-$90 billion annually, indicating a substantial reduction in overall market liquidity [11] - The buyer pool has become smaller and more selective, with many traditional institutional investors remaining on the sidelines [12] Company Strategy and Development Direction - The company is focused on three priorities: improving leasing performance and occupancy, maintaining financial flexibility and operational discipline, and continuing the review of strategic alternatives to enhance shareholder value [17] - The board is evaluating various strategic alternatives, including portfolio-level transactions, individual asset sales, and refinancing alternatives [5][6] Management's Comments on Operating Environment and Future Outlook - Management noted that the office sector has experienced significant shifts in capital market conditions due to rising interest rates and reduced institutional capital allocation [10] - The company remains committed to evaluating opportunities that may enhance shareholder value while considering current market conditions [16][17] Other Important Information - The company is actively engaged in a strategic review process that began in May 2025, with no assurances regarding the outcome or timing of this process [6] - The current transactional capital markets environment for office real estate is characterized by reduced transaction liquidity and increased return expectations on office investments [12][13] Q&A Session Summary - The call did not include a Q&A session as management opted for brief remarks and did not take questions [5]

Financial Data and Key Metrics Changes - The company has not conducted traditional quarterly earnings calls recently due to an ongoing review of potential strategic alternatives [4] - The refinancing of the credit facility was completed, closing a $320 million secured credit facility, which replaced approximately $249 million of outstanding indebtedness [7][8] - The decision to suspend quarterly dividends is expected to preserve approximately $4.1 million in cash annually, which can be redeployed into leasing efforts [9] Business Line Data and Key Metrics Changes - General and administrative expenses were reduced by approximately $1.5 million, or about 10%, declining from $13.9 million in 2024 to $12.4 million in 2025 [10] Market Data and Key Metrics Changes - National office transaction volume has declined significantly from an average of $140-$150 billion per year to approximately $80-$90 billion annually, indicating reduced market liquidity [11] - The buyer pool has become smaller and more selective, with many traditional institutional investors remaining on the sidelines [12] - The current buyer universe consists primarily of opportunistic capital and private equity funds targeting higher IRR thresholds [13] Company Strategy and Development Direction - The board is evaluating various strategic alternatives, including portfolio-level transactions, individual asset sales, and refinancing alternatives, to maximize shareholder value [5][6] - The company remains focused on improving leasing performance and occupancy, maintaining financial flexibility, and continuing the review of strategic alternatives [17] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the significant shift in capital market conditions for the office sector due to rising interest rates and reduced institutional capital allocation [10] - The company is committed to evaluating opportunities that may enhance shareholder value while considering the realities of the current capital markets environment [16][17] Other Important Information - The refinancing of the credit facility simplifies the capital structure by replacing a large syndicate of lenders with a single institutional lender experienced in real estate [8] - The company is open to pursuing transactions where market conditions allow values that reflect the quality and long-term economics of its assets [17] Q&A Session Summary - The company did not take questions during this call, as it was focused on providing updates regarding its strategic review process and financial status [5]

Financial Data and Key Metrics Changes - The company raised $12.6 million in estimated net proceeds from a public offering and concurrent private placement that closed on February 25, 2025, strengthening its balance sheet [11] - Fourth quarter 2025 cash burn was $2.2 million, down from $2.6 million in the fourth quarter of 2024, and below guidance of $2.5 million-$2.7 million [12] - Full year 2025 cash burn was $9.6 million, slightly higher than $9.2 million in 2024, but below the guidance of approximately $10 million [12][16] - Cash and cash equivalents totaled $6.1 million at December 31, 2025, excluding the recent capital raise proceeds [14] - Net loss in the fourth quarter of 2025 was $1.9 million compared to $2.6 million in the fourth quarter of 2024 [16] Business Line Data and Key Metrics Changes - The company did not record revenue in the fourth quarter of 2025, with initial orders expected to be small as customers progress through their design cycles [14][15] - Operating expenses were $1.9 million in the fourth quarter of 2025, down from $2.8 million in the fourth quarter of 2024, primarily due to lower stock-based compensation [15] Market Data and Key Metrics Changes - The company identified nearly $200 million in potential sales opportunities globally, with plans to expand the sales funnel through new engagements and opportunities [8] - The company is focused on markets such as data centers, battery energy storage systems, and grid applications for the commercialization of B-TRAN products [47] Company Strategy and Development Direction - The company announced a multi-year strategic cooperation agreement with Lasin for the design, development, and worldwide sales of B-TRAN enabled circuit protection products [3][4] - Strategic priorities include securing production orders, completing deliverables under existing purchase orders, and exploring strategic investment opportunities with global market leaders [9][10] - The company aims to expand its sales resources and distributor network to accelerate B-TRAN commercialization [63] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of disciplined execution of their strategy to accelerate commercialization and deliver value to shareholders [3] - The company expects to see increased cash burn in the first quarter of 2026 due to planned hiring, including expanding the direct sales team [13] - Management remains optimistic about the potential for B-TRAN products in various applications, including EVs and data centers [47][61] Other Important Information - The company has 100 issued B-TRAN patents, with 48 issued outside the United States, and a list of pending B-TRAN patents now at 78 [6][7] - The company treats its double-sided wafer process flow as a trade secret to safeguard its intellectual property [7] Q&A Session Summary Question: What is the expected range for SG&A in 2026? - SG&A is expected to remain relatively flat, with potential low single-digit increases [20][23] Question: Will Lasin's use of the product be for new builds or retrofits? - Lasin is developing solid-state circuit breakers for various applications, with opportunities for both new builds and retrofits [24][25] Question: What are the milestones with Stellantis? - There are four remaining deliverables under the Stellantis purchase order, all of which are within the company's control [35] Question: What product development work is still required? - Current B-TRAN products meet target applications, and the focus is on customer-specific product development [42][43] Question: What are the main hurdles to cross sizable orders? - The main hurdle is completing product development and qualifications with customers [44] Question: Are there opportunities for NRE revenue in 2026? - Yes, there are opportunities for custom development that could generate NRE revenue [46] Question: What solutions will drive the earliest revenue? - Solid-state circuit breakers and static transfer switches are expected to drive the earliest revenue [47] Question: How will the company expand the sales funnel? - The company is investing in sales resources and leveraging its distributor network to accelerate sales [48][51] Question: Will Lasin manufacture the product? - Lasin is expected to be on a purchase order relationship, with potential for longer-term supply agreements [54] Question: What is the status of automotive qualification testing? - The company expects to complete automotive reliability testing by summer [57] Question: How will Stellantis sharing technology with Leapmotor affect the relationship? - It could be a positive for Ideal Power, opening up a larger market opportunity [61] Question: Will B-TRAN be used across multiple vehicle models? - The expectation is that successful adoption will lead to use across multiple models [62] Question: What milestones will be achieved with the recent capital raise? - The capital raise will support the expansion and acceleration of B-TRAN commercialization and sales initiatives [63]

Financial Data and Key Metrics Changes - The company raised $12.6 million in estimated net proceeds from a public offering and private placement that closed on February 25, 2026, strengthening its balance sheet [11] - Fourth quarter 2025 cash burn was $2.2 million, down from $2.6 million in Q4 2024 and $2.7 million in Q3 2025, which was below guidance of $2.5-$2.7 million [12] - Full year 2025 cash burn was $9.6 million, slightly higher than $9.2 million in 2024, and below the guidance of approximately $10 million [12] - Cash and cash equivalents totaled $6.1 million at December 31, 2025, excluding the recent capital raise proceeds [13] - Net loss in Q4 2025 was $1.9 million compared to $2.6 million in Q4 2024, while the full year net loss was $10.6 million compared to $10.4 million in 2024 [16] Business Line Data and Key Metrics Changes - The company has identified nearly $200 million in potential sales opportunities, focusing on expanding the sales funnel with new engagements [8] - Initial orders from companies evaluating products are expected to be small, with order sizes increasing as customers progress through their design cycles [14] Market Data and Key Metrics Changes - The company is advancing its relationship with Stellantis, completing the first of five deliverables under a purchase order for custom development of B-TRAN devices for EV applications [5] - The first B-TRAN enabled solid-state circuit breaker is expected to target AI data center customers, with potential applications in renewable energy and EV charging infrastructure [4] Company Strategy and Development Direction - The company aims to accelerate commercialization and deliver increased value to shareholders and customers through disciplined execution of its strategic plan [3] - Strategic priorities include expanding the sales funnel, securing production orders, and exploring strategic investment opportunities with global market leaders [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic cooperation with Lasin and the potential for B-TRAN technology to address market shifts, particularly in data centers and EV applications [9] - The company expects to complete automotive reliability testing by summer 2026, indicating progress in its automotive qualification efforts [55] Other Important Information - The company has 100 issued B-TRAN patents, with 48 issued outside the United States, and a pending list of 78 patents [6] - The company is focused on maintaining a clean capital structure with no debt post-offering [12] Q&A Session Summary Question: What is the expected range for SG&A in 2026? - SG&A is expected to remain relatively flat, with potential low single-digit percentage increases [19][22] Question: Will Lasin's use of the product be for new builds or retrofits? - Lasin is developing solid-state circuit breakers for both new builds and potential retrofits in existing applications [24] Question: What are the milestones with Stellantis? - There are four remaining deliverables under the Stellantis purchase order, all of which are within the company's control [34] Question: What product development work is still required? - Current B-TRAN products meet target applications, with ongoing work focused on customer-specific product development [41] Question: Are there opportunities for NRE revenue in 2026? - Yes, there are opportunities for custom development that could generate NRE revenue [45] Question: What solutions will drive the earliest revenue? - Solid-state circuit breakers and static transfer switches are expected to drive the earliest revenue [46] Question: How will the company expand the sales funnel? - The company is investing in sales resources and leveraging its distributor network to accelerate B-TRAN commercialization [47] Question: Will Lasin manufacture the product? - Lasin is expected to be on a purchase order relationship, with potential for licensing agreements in the future [52] Question: What are the thoughts on Stellantis sharing EV technology with Leapmotor? - This could be a positive for Ideal Power, potentially opening up a larger market opportunity [58] Question: How will B-TRAN be utilized across multiple vehicle models? - The expectation is that successful adoption of B-TRAN will span multiple models within automotive companies [59] Question: What milestones will be achieved with the recent capital raise? - The capital raise will support the expansion and acceleration of B-TRAN commercialization and sales initiatives [60]

Financial Data and Key Metrics Changes - Priority Technology reported a net revenue growth of 8% for the full year 2025, with adjusted gross profit and adjusted EBITDA growth of 14% and 10% respectively, and adjusted EPS increased by 102% year-over-year to $1.03 [4][5] - For Q4 2025, revenue was $247.1 million, a 9% increase from the prior year, leading to a 19% increase in adjusted gross profit to $100.2 million and a 16% improvement in adjusted EBITDA to $60.1 million [6][12] - Adjusted gross profit margin for Q4 was 40.6%, up 360 basis points from the prior year, reflecting strong performance in high-margin segments [7][12] Business Line Data and Key Metrics Changes - Merchant Solutions generated Q4 revenue of $165.3 million, a 6.2% increase year-over-year, with 3% organic growth [14] - Payables segment revenue increased by 12.7% year-over-year to $26.8 million, with adjusted gross profit rising by 15.9% to $7.4 million [17] - Treasury Solutions revenue for Q4 was $57.3 million, up 17.8% year-over-year, driven by strong enrollment trends and an increase in billed clients [19] Market Data and Key Metrics Changes - The company ended 2025 with 1.8 million total customer accounts, up from 1.2 million the previous year, and annual transaction volume increased by $20 billion to $150 billion [5] - Average account balances under administration improved by $500 million to $1.7 billion [5] Company Strategy and Development Direction - The company anticipates achieving 6%-9% top-line revenue growth in 2026, with adjusted EBITDA expected to range from $230 million to $245 million [6][24] - Priority is focusing on its Connected Commerce platform to streamline financial operations for businesses, emphasizing the importance of compliance and operational efficiency [8][10] - The company is investing in high-growth areas such as real estate, healthcare, and sports entertainment, while also addressing the competitive landscape with modern technology solutions [49][50] Management's Comments on Operating Environment and Future Outlook - Management noted stabilization in the macro environment in Q4 compared to Q3, with expectations of similar conditions for 2026 [33] - The company is cautious about potential headwinds from lower interest rates and is adjusting growth expectations accordingly [34][25] - Management expressed confidence in the long-term stability and performance of the company despite economic uncertainties [29] Other Important Information - The company successfully remediated a material weakness in its internal controls over financial reporting as of December 31, 2025 [26] - Free cash flow for Q4 was $28 million, with expectations for continued cash generation in 2026 [21][58] Q&A Session Summary Question: Stabilization in the macro environment - Management indicated that Q4 showed stabilization compared to Q3, with guidance for 2026 reflecting similar macro conditions [33] Question: Update on enterprise business pipeline - The pipeline remains strong, but conversion timelines are variable, particularly in real estate and sports entertainment [36] Question: Average CFTPay monthly enrollments - The slowdown in new enrollments in Q4 was seasonal, with expectations for an uptick in Q1 [40] Question: Key strategic priorities for 2026 - The company will continue to invest in high-growth areas and maintain a disciplined approach to M&A [47][62] Question: Sustainability of Payables EBITDA growth - Management expects EBITDA growth to correlate more closely with revenue growth moving forward, with no significant margin shifts anticipated [72]

Financial Data and Key Metrics Changes - The company has not conducted traditional quarterly earnings calls recently due to an ongoing review of potential strategic alternatives [4] - The refinancing of the credit facility was completed, amounting to $320 million, which replaced approximately $249 million of outstanding indebtedness [6][7] - The decision to suspend quarterly dividends is expected to preserve approximately $4.1 million in cash annually [8] Business Line Data and Key Metrics Changes - General and administrative expenses (G&A) were reduced by approximately $1.5 million, or about 10%, declining from $13.9 million in 2024 to $12.4 million in 2025 [9] Market Data and Key Metrics Changes - National office transaction volume has declined to approximately $80-$90 billion annually, down from pre-pandemic levels of $140-$150 billion [10] - The buyer pool has become smaller and more selective, with many traditional institutional investors reassessing their allocations to the office sector [11][12] - Transaction activity in markets such as Denver, Dallas, Houston, and Minneapolis remains well below historical levels, although there are signs of gradual stabilization in leasing markets [14] Company Strategy and Development Direction - The company is focused on three priorities: improving leasing performance and occupancy, maintaining financial flexibility and operational discipline, and continuing the review of strategic alternatives [15] - The board is evaluating various strategic alternatives, including portfolio-level transactions, individual asset sales, and refinancing options, to maximize shareholder value [5][6] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the significant shift in capital market conditions for the office sector due to rising interest rates and reduced institutional capital allocation [9][10] - The company remains committed to evaluating opportunities that may enhance shareholder value while considering the realities of the current capital markets environment [15] Other Important Information - The company has engaged BofA Securities as a financial advisor to assist in the strategic review process [5] - The board's objective is to conduct the strategic review in a disciplined manner, with no assurances regarding the outcome or timing of the process [6] Summary of Q&A Session - The company did not take questions during this earnings call, focusing instead on providing updates regarding its strategic review and financial position [5]

Financial Data and Key Metrics Changes - The company reported record revenues of $193.6 million for Q4 2025, a 27% increase year over year, and full-year revenues of $730.2 million, up 28% from 2024 [3][4] - Earnings before tax for the year reached $160.6 million, with adjusted EBITDA of $459 million, reflecting a 16.6% increase from $393.7 million in the prior year [4][16] - Average lease portfolio utilization increased to 85% from 83% in 2024, with an average lease rental factor exceeding 1% per month [5] Business Line Data and Key Metrics Changes - Core lease rent revenues were $291.6 million, and interest revenues were $14.1 million, driven by an increased total portfolio size of $3 billion at year-end 2025 [16] - Maintenance reserve revenues for the year were $232 million, an increase of 8.4% from 2024, with long-term maintenance reserves associated with engines coming off long-term lease rising to $44.5 million [18] - Spare parts and equipment sales to third parties increased significantly to $95.5 million from $27.1 million in 2024, driven by a 44.4% increase in spare parts sales [19] Market Data and Key Metrics Changes - The aviation market remains engine-centric, with over 600 aircraft powered by GTF engines grounded due to technical issues, while the outlook for engine shop visits remains strong through the mid-2030s [6] - The company noted robust demand for maintenance checks in the European market during the winter season, with a focus on supporting leasing companies and airlines during the summer [14] Company Strategy and Development Direction - The establishment of Willis Aviation Capital aims to accelerate growth in assets under management and services businesses, with a focus on deploying capital into discretionary funds [7][10] - The company has formed partnerships with Liberty Mutual and Blackstone to support its fund business, which will enhance competitiveness in financing aircraft engines [8][9] - The decision to cease the sustainable aviation fuel project reflects a strategic focus on areas where the company has a stronger competitive advantage [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term demand environment for the business model, citing the need for engine leasing and repair services as critical to maintaining operational fleets [6][11] - The company anticipates continued growth in maintenance reserve revenues as the portfolio expands, despite the lumpiness of long-term maintenance revenue [50] - Management highlighted the importance of maintaining a strong cash flow while returning capital to shareholders through dividends [5][34] Other Important Information - The company reported a maintenance-adjusted market value of its portfolio exceeding book value by approximately $700 million, excluding potential future end-of-lease payments [24] - General and administrative expenses increased to $194.7 million, primarily due to personnel costs and share-based compensation [25][26] - The company recognized a $43 million gain from the sale of its subsidiary, Bridgend Asset Management Limited, to its joint venture [29] Q&A Session Summary Question: Plans for seeding the Blackstone portfolio - The company has a small seed portfolio intended for both Blackstone and Liberty Mutual, with most assets expected to come from market origination [37] Question: Competitive advantages in sourcing engines - The company maintains strong relationships with OEMs and has a successful track record in acquiring high-volume, low-price assets through various programs [41] Question: Leveraging the Blackstone investment - The company indicated that the $1 billion figure includes leverage on assets, and it plans to structure debt financing similarly to past practices [46] Question: Maintenance reserve liability and long-term maintenance revenue - Management acknowledged the lumpiness of long-term maintenance revenue and noted that the increase in maintenance reserve liability reflects future earnings potential [50] Question: Share repurchases and asset-light model - The company clarified its position as "asset-medium" rather than asset-light, emphasizing the continued importance of owning assets on the balance sheet [54] Question: Insurance claims related to Russia - The company confirmed ongoing insurance claims related to assets in Russia, expressing confidence in recovery outcomes [56]

Financial Data and Key Metrics Changes - In Q4 2025, the company generated revenue of $528 million, with adjusted EBITDA of $121 million, reflecting an 18% year-over-year increase [4][12] - For the full year 2025, revenue reached a record $1.944 billion, up 8% from 2024, and adjusted EBITDA was $384 million, a 13% increase [4][12] - GAAP net income for Q4 was approximately $21 million, while the full year showed a net loss of about $31 million, impacted by a prior year gain on a sale leaseback transaction [14] Business Line Data and Key Metrics Changes - In the Equipment Rental Services (ERS) segment, Q4 revenue was $207 million, up 20% year-over-year, driven by strong rental revenue and sales activity [14] - The Total Equipment Sales (TES) segment saw Q4 revenue of $284 million, down 8% year-over-year, but full year revenue was up 4% to $1.1 billion, marking a record [6][17] - The Aftermarket Parts and Services (APS) segment reported Q4 revenue of $37 million, with a stable gross margin of 27% [18] Market Data and Key Metrics Changes - The rental fleet utilization averaged just under 84% in Q4, the highest in almost three years, with average OEC on rent at nearly $1.4 billion, up 14% year-over-year [5][15] - The new sales order backlog for TES ended the year at $335 million, up 20% from Q3, and has continued to grow into 2026, currently around $370 million [7][18] Company Strategy and Development Direction - The company plans to move to a two-segment reporting structure starting Q1 2026, aligning with how the business is currently managed and providing clearer insights for investors [10][24] - A strategic partnership with Hiab aims to enhance service capabilities and broaden the product portfolio, supporting long-term growth strategies [8][9] - The company expects to invest approximately $150 million-$170 million in its rental fleet in 2026, a significant reduction from over $250 million in 2025 [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained demand across key end markets, particularly in transmission and distribution, and anticipates continued growth in 2026 [20][21] - The company expects revenue for 2026 to be in the range of $2.005 billion to $2.12 billion, with adjusted EBITDA between $410 million and $435 million, indicating year-over-year growth [10][23] - Management highlighted the importance of strong relationships with strategic suppliers and customers as key to success [11] Other Important Information - The company aims to reduce inventory levels to below six months on hand, targeting a decrease of approximately $100 million in gross inventory by the end of 2026 [80] - The company reported a net leverage ratio of 4.3 times at the end of 2025, with plans to reduce it to below 4x by the end of 2026 [19][22] Q&A Session Summary Question: What do you expect to see in the market to achieve the high end of the guidance range? - Management indicated strong demand in P&D and vocational markets, with potential upside from reduced political and economic uncertainty [28][30] Question: How do you view the pricing environment and its contribution going forward? - Management noted good demand and opportunities for price increases, with OEC on rent showing positive year-over-year growth [31][32] Question: Can you comment on the sustainability of the high utilization rates? - Management acknowledged that while utilization peaked in Q4, they expect to maintain strong levels due to fleet de-aging and operational execution [36][38] Question: How do you expect the TES segment to perform throughout the year? - Management expressed confidence in growth, supported by a strong backlog and increased orders won, despite previous pull-forward effects [46][50] Question: What is the outlook for gross margins in ERS and TES? - Management indicated that ERS gross margins are expected to remain strong, while TES margins may stabilize within a targeted range [62][65]

Financial Highlights - Managed EBITDA totaled BRL 7.8 billion in Q4 2025, broadly in line with Q4 2024, while full-year managed EBITDA reached BRL 26.5 billion, representing a decline compared to 2024, primarily driven by Raízen and Radar [4][5] - The company reported an adjusted net loss of BRL 0.7 billion in Q4 2025 and an adjusted net loss of BRL 4 billion for the full year, mainly due to lower equity income from businesses, particularly Raízen's ESB, sugar, ethanol, and bioenergy segment [5][6] - Total cash received from dividends and interest on equity was BRL 479 million in Q4 2025, with a full-year total of BRL 2.6 billion, down from BRL 4.3 billion in 2024, reflecting the absence of dividends from Moove and lower contributions from Compass [5][6] Business Line Performance - Rumo reported higher transported volumes and a 4% increase in EBITDA compared to 2024, supported by strong commercial efforts and disciplined cost management [8] - Compass achieved an 11% EBITDA growth on a recurring basis, driven by increased gas distribution volumes, particularly in the residential segment [8][9] - Moove's market share in Brazil reached 14.5% for the year, despite a decrease in total global volume sold, with financial performance slightly above 2024 levels [9] - Raízen's EBITDA was 6% lower than the prior period, impacted by lower property sales volume and a slower crushing pace, although fuel distribution saw volume and margin expansion [10] Market Data and Key Indicators - The company’s expanded net debt decreased to BRL 9.8 billion, a reduction of nearly BRL 14 billion, reflecting liability management initiatives and capitalization processes [11][12] - The Debt Service Coverage Ratio (DSCR) closed at 0.9 times, indicating elevated financial expenses and a decline due to lower dividend levels received [7][12] Company Strategy and Industry Competition - The company is focused on deleveraging and improving its capital structure, with a goal to bring the holding company's debt to zero, emphasizing efficiency and strategic divestments [40][41] - Ongoing discussions regarding Raízen's capital structure are critical, with a focus on finding a sustainable solution that does not compromise Cosan's overall capital structure [20][24] - The company is not currently prioritizing any specific asset for sale but remains open to divesting stakes in a timely manner based on market conditions [52][64] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2025 but expressed confidence in the company's resilience and adaptability, particularly in Moove's recovery strategy [31][32] - The management team is actively engaged in discussions with creditors regarding Raízen, aiming for a definitive solution to its capital structure issues [24][63] Other Important Information - The company completed significant transactions in 2025, including the sale of its stake in Vale for BRL 9 billion and public equity offerings that injected BRL 10.5 billion into Cosan's cash position [11] - The average cost of debt stood at CDI + 0.97%, representing a 43 basis point reduction compared to Q4 2024, with an average maturity remaining stable at 5.8 years [12] Q&A Session Summary Question: Future of Raízen's Capital Structure - Management discussed ongoing conversations regarding Raízen's capital structure and emphasized the importance of addressing it without impacting Cosan's leverage [18][20] Question: Efficiency Gains and Expense Reductions - Management confirmed that Moove has fully recovered its production capacity and is focusing on efficiency improvements, although significant gains have yet to be realized [31][32] Question: Deleveraging Goals - The goal is to bring the holding company's debt to zero, with no specific timeline but a commitment to create efficiency and optimize asset sales when conditions are favorable [40][41] Question: Rumo's Potential Sale - Management clarified that there are no current plans to sell Rumo, despite market speculation, and emphasized that any divestment would be considered carefully [52] Question: Radar's Divestment Progress - Management indicated that portfolio recycling is ongoing, but no concrete updates on divestments were available at this time [68]

Financial Data and Key Metrics Changes - Net sales declined 3.9% in Q4 and 4% for the year, with comparable sales down 2.8% in Q4 and 3.1% for the year [29][30] - Diluted earnings per share for Q4 were $1.07, an improvement from the previous year [7][33] - Gross margin in Q4 expanded by 25 basis points to 33.1% of sales, driven by strong inventory management [31] - SG&A expenses decreased by $76 million, or 4.9% in Q4, reflecting lower store, marketing, and fulfillment-related expenses [31][32] Business Line Data and Key Metrics Changes - Proprietary apparel was flat in Q4, while juniors business grew 8%, benefiting from investments in the proprietary brand SO [10][11] - The home business underperformed due to softness in seasonal decor, with inventory depth issues limiting customer choice [11][12] - Accessories business outperformed, with Sephora growing 2% and comparable sales improving to flat in Q4 [12][13] Market Data and Key Metrics Changes - Digital sales grew low single digits in Q4 but were flat for the year, primarily due to higher traffic offset by lower conversion [29][30] - Store sales declined mid-single digits for both Q4 and the full year, primarily due to a decrease in transactions [29][30] Company Strategy and Development Direction - The company is focused on stabilizing the business and strengthening operational capabilities for future growth [4][5] - Key initiatives for 2026 include offering a curated assortment, enhancing proprietary brands, and improving promotional strategies to deliver better value [15][20][22] - The company aims to reestablish itself as a leader in value and quality, particularly for low to middle-income customers [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in Q4, including severe weather impacting sales and the need for better execution in seasonal business [7][8] - The company remains cautious about the macroeconomic environment, particularly regarding the spending behavior of core customers [35][36] - For 2026, the company expects net sales and comparable sales to be in the range of a 2% decrease to flat versus 2025 [36] Other Important Information - The company ended the year with $674 million in cash and cash equivalents, an increase of $540 million from the previous year [34] - Inventory decreased approximately 7% compared to last year, positioning the company with stronger, fresher spring inventory [34] Q&A Session Summary Question: Can you talk about the Buy Kohl's campaign and expectations for Kohl's cardholder comps in 2026? - The Buy Kohl's campaign emphasizes the proprietary brand portfolio and aims to showcase these brands across both stores and digital platforms [40][41] - Expectations for Kohl's cardholder comps are to improve from mid-teens declines to mid-single digits, driven by investments in proprietary brands and restoring trip assurance [42][44] Question: What are the specific headwinds captured in the EBIT margin guidance? - The EBIT margin guidance reflects challenges in leveraging SG&A costs due to the fixed cost nature of the business, with a focus on maintaining expense management [55][56] Question: What are the biggest opportunities in the women's and home categories? - The women's business sees opportunities in juniors and denim, while the home category will focus on providing more choices and sharp price points in seasonal decor [62][65]