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][13] - 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][13] - 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 growth [14] - The Total Equipment Sales (TES) segment reported Q4 equipment sales of $284 million, with full year revenue up 4% to $1.1 billion, marking the highest annual level ever [18][19] - The Aftermarket Parts and Services (APS) segment had Q4 revenue of $37 million, with a stable gross margin of 27% [19] 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 approximately $1.4 billion, up 14% year-over-year [5][16] - 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][19] 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 evaluated [11][25] - A strategic partnership with Hiab aims to enhance service capabilities and broaden the product portfolio, supporting long-term growth [9] - The company is investing in expanding aftermarket service capacity to support TES customers post-sale and grow parts and service revenue [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained demand in the transmission and distribution (T&D) markets, expecting continued growth in 2026 [6][21] - The company anticipates revenue for 2026 in the range of $2.005 billion to $2.12 billion, with adjusted EBITDA between $410 million and $435 million [11][24] - Management noted that macroeconomic uncertainties could impact performance, but strong fundamentals in end markets provide optimism [27] Other Important Information - The company expects to reduce maintenance CapEx in 2026 compared to 2025, contributing to increased free cash flow generation [22] - Inventory levels are projected to decline further, with a target to reduce gross inventory by approximately $100 million [82] Q&A Session Summary Question: What do you expect to see in the market to achieve the high end of your guidance range? - Management indicated strong demand in P&D and potential improvements in the vocational and infrastructure markets as positive drivers [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 [34] Question: Can you sustain the high utilization rate of 84%? - Management stated that while 84% is above the typical range, they believe they can maintain strong utilization levels due to effective fleet management and a younger fleet age [40] Question: What is the expected performance of the TES segment throughout the year? - Management expressed confidence in the TES segment's growth, supported by a strong backlog and order trends [50] Question: How do you expect inventory levels to change this year? - Management aims to reduce inventory levels further, targeting a decrease of about $100 million [82]

Financial Data and Key Metrics Changes - 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 [3][4] - 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, primarily due to lower equity income from businesses [3][4] - Total cash received from dividends and interest on equity was BRL 2.6 billion for the full year, down from BRL 4.3 billion in 2024, reflecting the absence of dividends from Moove [4] Business Line Data and Key Metrics Changes - Rumo reported higher transported volumes and a 4% increase in EBITDA compared to 2024, supported by strong commercial efforts and disciplined cost management [6] - Compass achieved an 11% EBITDA growth on a recurring basis, driven by increased gas distribution volumes, particularly in the residential segment [6][7] - At Moove, 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 [7] - 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 [8] Market Data and Key Metrics Changes - The company completed the sale of its stake in Vale, raising BRL 9 billion, and announced public equity offerings that injected BRL 10.5 billion into its cash position [9] - Expanded net debt decreased to BRL 9.8 billion, a reduction of nearly BRL 14 billion, reflecting liability management initiatives [5][10] Company Strategy and Development Direction - The company is focused on addressing Raízen's capital structure while prioritizing its own leveraging, with ongoing discussions with creditors and partners [15][19] - The strategy includes a commitment to deleverage the holding company and simplify its structure, with a goal to bring the holding company's debt to zero [27][28] - The management is exploring options for divestments but emphasizes that no specific assets are currently prioritized for sale [39] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced by Moove in 2026 due to inefficiencies created by a new logistics strategy but expressed confidence in recovering historical profitability levels [24] - The management is optimistic about finding a satisfactory solution for Raízen's capital structure, emphasizing the need for a definitive and suitable capital structure for different businesses [19][20] Other Important Information - The company reported a significant improvement in safety indicators, with no fatalities recorded, reaffirming its commitment to safety across operations [5] - The average cost of debt stood at CDI + 0.97%, representing a 43 basis point reduction compared to Q4 2024 [10] Q&A Session Summary Question: Future and Raízen's capital structure - Management discussed ongoing conversations regarding Raízen's capital structure and the limitations on Cosan's capital contributions, emphasizing the need for a solution that does not impact Cosan's leverage [13][15][19] Question: Efficiency gains and expense reductions - Management confirmed that efficiency gains at the holding company level have just begun, with a focus on adapting the holding company's role to facilitate new partners' contributions [25][26] Question: Moove's production capacity post-fire - Management stated that Moove has fully recovered its production capacity and is working on a new logistics strategy to improve margins [23][24] Question: Deleveraging strategy and goals - Management aims to bring the holding company's debt to zero, with no specific timeline but a commitment to create efficiency and optimize asset sales when market conditions are favorable [27][28][30] Question: Speculation about selling Rumo - Management clarified that there are no current plans to sell Rumo, despite market speculation, and emphasized that any divestment would be considered when the timing and structure are right [33][34][39] Question: Update on Radar's divestments - Management indicated that portfolio recycling is ongoing, with no concrete news on divestments at this time [40]

Financial Data and Key Metrics Changes - Stagwell reported a 6% growth in 2025, driven by a 13% increase in digital transformation and a 6% increase in marketing services [3] - Adjusted EBITDA for 2025 was $422 million, with a margin of 17.4%, and excluding advocacy, it increased 15.9% to $377 million [9][22] - Free cash flow more than doubled to $187 million in 2025, representing nearly 45% conversion of adjusted EBITDA [10][25] Business Line Data and Key Metrics Changes - The Marketing Cloud segment exceeded $105 million in revenue, growing 34% organically for the full year, with 41% organic growth in Q4 [6] - Digital transformation and marketing services showed organic growth of 9% and 5% respectively, indicating strong market share acquisition [4] - The marketing cloud grew 230% or 34.3% organically, reflecting increased adoption of its product suite [20] Market Data and Key Metrics Changes - The company expects approximately 10% net revenue growth in 2026, primarily organic, driven by political increases and new business [4] - The media segment is anticipated to return to high single-digit organic growth, supported by new media technology products [8] - The top 25 customers grew 20% year-over-year, representing 29% of total revenue [6] Company Strategy and Development Direction - Stagwell is focusing on accelerated organic growth, market share expansion, and advanced AI applications [3] - The company is pivoting towards AI application development, slowing down planned acquisitions to allocate capital effectively [5] - A significant buyback program has been announced, reflecting confidence in the company's valuation and future growth potential [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong double-digit growth for digital transformation in 2026, driven by increased AI investments [30] - The upcoming political super cycle is expected to generate significant advocacy revenue, with a strong interest in the midterm elections [37] - The company is positioned to benefit from instability among competitors, leading to increased client turnover and organic growth opportunities [50] Other Important Information - The company has implemented significant changes in operations, focusing on technology-led models to improve efficiency and scalability [24] - Capital expenditures in 2025 were directed towards systems and platforms that enhance efficiency, with expectations for consistent levels in 2026 [26] - The company has reduced its share count significantly, enhancing its equity profile and commitment to returning capital to shareholders [27] Q&A Session Summary Question: Confidence in digital transformation growth continuation - Management expects even stronger double-digit growth in digital transformation for 2026, driven by AI investments and system integrations [30] Question: Revenue growth and EBITDA contribution from new products - Initial revenue expectations for new products are around $25 million in the first year, with potential for significant growth thereafter [33] Question: Creative pacing amid AI disruption - Premium creative remains in high demand, with agencies like Anomaly and 72andSunny achieving record revenues [35] Question: Advocacy trends for 2026 - Early trends indicate a strong political season ahead, with significant expenditures expected in the upcoming midterm cycle [37] Question: Potential for cost-cutting and efficiencies - The company is on track to achieve additional cost savings, with potential upside not fully reflected in current budget guidance [41] Question: Doubling of free cash flow in 2025 - Actions taken included establishing a shared service platform and improving working capital management, contributing to the doubling of free cash flow [44] Question: Competitive environment post-merger of competitors - Increased instability among competitors is benefiting Stagwell, allowing for larger pitches and client turnover [50] Question: Expectations for share repurchase strategy - The buyback is expected to be more aggressive than in previous years, focusing on achieving fair valuation for the stock [51]

Financial Data and Key Metrics Changes - The company ended the fourth quarter with approximately $379 million in cash equivalents and investments, exceeding internal targets for the quarter, reflecting disciplined capital management [24] - The total project costs for Project Permian are estimated to be in the range of $475 million to $575 million, which supports the project's economics [44][47] - The company is targeting 65% debt financing for the project, which translates to approximately $100 million in equity required from NET Power [78] Business Line Data and Key Metrics Changes - The integrated clean power product combines two Siemens SGT-A35 gas turbines with Entropy's post-combustion carbon capture system, designed for over 90% CO2 capture [12] - The redesign of the plant has increased the net electrical output from approximately 60 megawatts to 80 megawatts, a 33% increase in generation capacity [17] Market Data and Key Metrics Changes - The demand for clean, firm baseload power is increasing, driven by AI data centers and industrial re-onshoring, with significant load growth projected in West Texas [5][6] - Power prices in ERCOT have risen significantly, with forward curves suggesting prices of $65-$70 per megawatt hour for 2028-2030, compared to $40-$45 a year prior [32] Company Strategy and Development Direction - The company has pivoted from Oxy-combustion to a combined cycle gas turbine paired with post-combustion carbon capture as its primary commercial vehicle, aiming to transform natural gas into the lowest cost form of clean power [3][4] - The company is focused on Project Permian in West Texas, which has the potential to scale to approximately 800 megawatts, establishing a foundation for a large clean power campus [23] Management's Comments on Operating Environment and Future Outlook - Management believes the timing for their strategic pivot is ideal, given the urgent need for reliable power generation infrastructure in the U.S. [5][11] - The policy environment is supportive of carbon capture and storage (CCS), reinforcing the company's position in the market [10] Other Important Information - The company is actively negotiating offtake agreements, with a goal to secure pricing at or above $100 per megawatt hour, which is essential for project bankability [22] - The partnership with Entropy is critical, as it aligns incentives and performance directly with NET Power's goals [15] Q&A Session Summary Question: What does the competitive landscape look like for the $100 per megawatt hour pricing? - Management noted that power prices have increased significantly, with current prices for new contracted capacity potentially exceeding $100 per megawatt hour, reflecting the urgency for reliable power solutions [32][34] Question: Is there potential for government support on the financing side? - Management indicated that the current administration is supportive of solutions that enhance domestic energy supply and could provide financial support through grants or loans [36][38] Question: What are the total project costs for Project Permian? - The estimated total project costs are in the range of $475 million to $575 million, with ongoing efforts to secure long lead equipment and project financing [44][47] Question: What is the focus regarding the commercial pipeline beyond Project Permian? - The company is currently focused on Project Permian due to its economic advantages and opportunities in West Texas, with optionality around other projects remaining [50][51] Question: What are hyperscalers looking for in offtake agreements? - Hyperscalers are interested in speed to power, reliability, and the ability to decarbonize while meeting their energy demands, which aligns with NET Power's offerings [56][59]

Financial Data and Key Metrics Changes - In Q2 of fiscal 2024, the company's sales were nearly $8 billion, reflecting a decline of 2.6% compared to the previous year, impacted by nearly 500 basis points from optimization actions [14][15] - Adjusted EBITDA grew by 23% to $179 million, with an adjusted EBITDA margin of 2.3% of net sales, up about 50 basis points year-over-year [18] - Free cash flow increased by $50 million to $243 million, enabling a reduction in net debt to its lowest level since fiscal 2018 and lowering the net leverage ratio to 2.7x [20][21] Business Line Data and Key Metrics Changes - Natural product sales grew by 7%, outperforming the market, while conventional product sales declined by 12%, primarily due to network optimization efforts [15][16] - Retail sales fell by 8%, largely due to strategic store closures, although same-store sales improved sequentially by 100 basis points, declining by 2% during the quarter [16] Market Data and Key Metrics Changes - The company continues to target a $90 billion addressable market, with expectations for low single-digit average sales growth from fiscal 2024 through fiscal 2028 [11][12] - The majority of the customer base showed resilience despite some softness in food retail, with wholesale sales growth in line with target addressable market growth rates [10] Company Strategy and Development Direction - The company is focused on a value creation strategy aimed at achieving shared, profitable growth with customers and suppliers, enhancing capabilities in areas such as supply chain, technology, and private brands [5][9] - The implementation of an AI-powered supply chain planning platform, Relex, is expected to improve customer service and inventory management, contributing to better free cash flow [7] Management's Comments on Operating Environment and Future Outlook - Management remains confident in long-term expectations for low single-digit average sales growth, emphasizing the importance of differentiation among grocers for sustained growth [11][12] - The company is adjusting its full-year sales outlook to a range of $31 billion to $31.4 billion, reflecting optimization work and deceleration in food retail sales trends [22] Other Important Information - The company repurchased nearly 750,000 shares for approximately $25 million, reflecting confidence in long-term value creation potential [21] - A voluntary $115 million prepayment on senior notes was made, reducing annualized net interest expense by over $2 million [21] Q&A Session Summary Question: Impact of network optimization on conventional sales - The company noted a 500 basis point headwind from network optimization, primarily due to the exit from the Allentown facility, which was executed faster than anticipated [28][30] Question: Underlying business trends in conventional sales - Excluding network optimization impacts, the underlying business showed low single-digit growth, driven by inflation and volume trends [32] Question: Composition of the new business pipeline - The majority of the pipeline consists of incremental categories with existing customers, reflecting healthy relationships and value addition [37] Question: Future of productivity gains - Productivity increased by 6%, driven by automation and lean methodologies, with expectations for continued improvements [39] Question: Impact of SNAP changes on guidance - The company believes the impact of SNAP changes is manageable and has been factored into the guidance for the remainder of the year [49] Question: Progress on free cash flow and working capital - The company generated nearly $190 million of free cash flow in the first half, with ongoing efforts to improve working capital management [53] Question: Vendor-funded promotions and inflation outlook - Vendor promotions have become more selective, with a focus on peak holiday moments, while inflation is modeled at low single digits for the remainder of the year [64][66]

Financial Data and Key Metrics Changes - The company ended the fourth quarter with approximately $379 million in cash equivalents and investments, exceeding internal targets for the quarter, reflecting disciplined capital management during the transition [24] - The total project costs for Project Permian are estimated to be in the range of $475 million to $575 million, which supports the project's economics [44][47] Business Line Data and Key Metrics Changes - The integrated clean power product combines two Siemens SGT-A35 gas turbines with Entropy's post-combustion carbon capture system, designed for over 90% CO2 capture, representing a unique market offering [12][13] - The redesign of the plant configuration has increased the net electrical output from approximately 60 MW to 80 MW, a 33% increase in generation capacity from the same site footprint [17] Market Data and Key Metrics Changes - The forward curve for power prices in ERCOT has increased from $40-$45 per MWh to $65-$70 per MWh, indicating an 80% increase in wholesale power prices in West Texas [32][33] - There is a growing demand for clean, firm dispatchable power, with customers actively seeking reliable energy solutions rather than idealistic environmental options [7][21] Company Strategy and Development Direction - The company has pivoted from oxy-combustion to a more direct approach using natural gas power with over 90% carbon capture, aligning with market urgency for reliable energy solutions [3][4] - The focus is on Project Permian in West Texas, which has the potential to scale to approximately 800 MW, establishing a foundation for a significant clean power complex [23][50] Management's Comments on Operating Environment and Future Outlook - The management emphasizes the critical need for clean, firm baseload power and the strong policy support for carbon capture and storage (CCS) technologies [10][11] - The current geopolitical climate underscores the importance of domestic oil and natural gas for national security, reinforcing the company's strategy to enhance domestic energy production responsibly [9] Other Important Information - The company is actively pursuing project financing, targeting 65% debt and 35% equity for Project Permian, with a focus on securing long-term power purchase agreements to support financing [26][79] - The partnership with Entropy is crucial, as it aligns incentives and enhances the project's credibility in the market [15] Q&A Session Summary Question: What does the competitive landscape look like for the $100 per MWh offtake pricing? - Management noted that power prices have significantly increased, with new contracted capacity discussions indicating prices north of $100 per MWh, reflecting the urgency for reliable energy solutions [32][34] Question: What potential government support is there for financing? - Management indicated that the current administration is supportive of domestic energy solutions that enhance energy security, which could lead to financial support through grants or loans [36][38] Question: What are the updated project costs for Project Permian? - The estimated total project costs are in the range of $475 million to $575 million, with ongoing efforts to secure long lead equipment and finalize project financing [44][47] Question: What is the focus regarding the commercial pipeline beyond Project Permian? - The company is currently focused on Project Permian due to its economic advantages and opportunities in West Texas, having pulled out of the MISO queue due to rising costs [50][51] Question: What are hyperscalers looking for in offtake agreements? - Hyperscalers are interested in speed, reliability, and the ability to meet their growth demands, with the company's solution providing a compelling option for clean, firm power [72][75]

Financial Data and Key Metrics Changes - In 2025, the company achieved record revenue of $66.6 million, a nearly 20% increase over 2024, with testing volume up over 11% and trailing 12-month ASP up over 7% [21][27][29] - Gross margin for 2025 was just over 58%, down from about 60% in 2024, reflecting ASP pressure experienced in the second half of the year [23][24] - Operating expenses for 2025 were $53 million, up about 13% compared to 2024, indicating early signs of scale in the business as revenue growth outpaced expense growth [24][25] Business Line Data and Key Metrics Changes - The company reset the volume run rate from approximately 30,000 tests in Q1 to over 35,000 tests in subsequent quarters, marking the highest Q4 testing volume in Exagen's history [11][21] - The ASP at the end of 2025 was approximately $441, up from $411 at the start of the year, driven by new product enhancements and improved revenue cycle management [12][21] Market Data and Key Metrics Changes - The company expanded its sales force from 40 to 45 territories in 2025, with expectations for improved productivity from new sales representatives over time [12][21] - The Pharma Services segment generated $1.7 million in revenue in 2025, significantly up from roughly $100,000 in 2024, with a backlog value of over $4 million expected to be realized over the next 2-3 years [23] Company Strategy and Development Direction - The company aims to own the entire autoimmune diagnostics space, focusing on comprehensive care and innovation to address significant unmet needs in the market [6][19] - The strategy includes advancing adoption through an upgraded sales force, expanding ASP through revenue cycle optimizations, and driving innovation with a structured product cadence [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve sustainable, profitable growth, guiding revenue expectations for 2026 to be between $70 million and $73 million [18][27] - The management highlighted the importance of achieving cash flow positivity and durable profitability, emphasizing the need for continued investment in commercial and R&D efforts [32][29] Other Important Information - The company is developing a solution for myositis, with plans to have it ready for commercialization by 2027, reflecting a strong demand from clinicians [36][16] - The American College of Rheumatology (ACR) has begun advocating for the company's AVISE platform, which is expected to enhance market access and support ASP growth [14][50] Q&A Session Summary Question: Why is it the right time to make investments despite profitability targets? - Management indicated that investments are necessary for durable cash flow positivity and to support long-term growth, with a focus on enhancing the commercial organization and R&D pipeline [32][35] Question: What is the commercialization target for myositis? - The company aims to have the myositis offering ready for the clinic by 2027, with ongoing internal feasibility studies and validation of assays [36] Question: What is the expected ASP for Q4 2026? - Management noted that while they have not disclosed the expected trailing twelve-month ASP, they anticipate stabilization and incremental gains in the second half of the year [38][39] Question: How is the Northwell Health situation impacting volume? - Management clarified that the Northwell situation was a one-time setback and that growth initiatives have compensated for any lost volume [39][40] Question: What is the status of the local coverage determination for rheumatologic diseases? - The company maintains regular contact with the team at MolDX regarding the draft LCD, which is expected to cover broader testing in rheumatologic conditions [71][72]

Financial Data and Key Metrics Changes - Revenue grew 6.1% year-over-year to $2.2 billion, driven by 5.5% organic growth and a modest contribution from an acquisition in Ireland [14] - Net income for the quarter was $38.8 million or $0.64 per diluted share, compared to $43.6 million or $0.69 per share in the prior year [15] - Adjusted EBITDA was $117.8 million, compared to $120.6 million in the prior year [16] Business Line Data and Key Metrics Changes - B&I segment revenue was $1.1 billion, up 4% year-over-year, with operating profit of $79.7 million and a margin of 7.5% [16] - Aviation revenue grew 10% to $297.7 million, with an operating profit of $12.6 million and a margin of 4.2% [17] - M&D generated $422.3 million in revenue, a 7% increase year-over-year, with an operating profit of $36.3 million and a margin of 8.6% [19] - Education revenue rose 2% to $228.7 million, with operating profit increasing 54% to $21.6 million and margin expanding to 9.4% [20] - Technical Solutions revenue was $229.7 million, up 14% year-over-year, but faced margin decline to 3.7% due to project timing and service mix [21] Market Data and Key Metrics Changes - Demand remains generally healthy across end markets, with improving transaction volumes in prime office spaces [4] - The aviation segment is supported by resilient TSA checkpoint volumes and ongoing airport infrastructure investments [5] - The semiconductor manufacturing sector is experiencing accelerated public and private investment, with a forecast of over $1.5 trillion in fabrication facility investment through 2030 [7] Company Strategy and Development Direction - The company is focused on strengthening its semiconductor capabilities through the WGNSTAR acquisition and enhancing its service offerings in energy resiliency and mission-critical operations [7][27] - The full-year outlook remains unchanged, with expectations of organic growth of 3%-4% and total growth of 4%-5% including acquisitions [24][25] - The company is investing in AI-driven technologies to enhance operational efficiency and service delivery [11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operating environment, acknowledging macroeconomic uncertainties while maintaining confidence in demand across markets [12][27] - The company expects a stronger performance in the second half of the fiscal year, particularly in Technical Solutions, as project timing normalizes [22][32] Other Important Information - The company ended the quarter with total indebtedness of $1.7 billion and available liquidity of $608 million [22] - Free cash flow for the quarter was $48.9 million, representing significant improvement over the prior year [23] Q&A Session Summary Question: Impact of project timing on margins - Management confirmed that project timing issues were primarily due to weather disruptions, with confidence that delays will be resolved in upcoming quarters [30] Question: Expected trajectory for margins throughout the year - Management indicated that historically, two-thirds of operating profit in the ATS business occurs in the second half of the year, suggesting a similar pattern for the current fiscal year [32] Question: Customer behavior in B&I segment - Management noted stable customer behavior with no significant requests for pricing concessions, although a large contract exit in the UK is expected to impact revenue [37] Question: Balancing capital deployment and deleveraging - Management stated that free cash flow will be used to reduce leverage back towards the target range below 3x following the WGNSTAR acquisition [42] Question: Education segment margins sustainability - Management expressed optimism about the education segment's margin profile, although some pressure is expected in the next quarter due to weather-related school closures [75] Question: Update on restructuring process - Management confirmed that the $35 million restructuring project was completed last year, with benefits expected to roll through the first half of the current year [84]

Financial Data and Key Metrics Changes - In Q4 2025, net product revenues were $22.3 million, up from $16.4 million in Q4 2024, indicating a strong performance [21] - For the full year 2025, net product revenues reached $73.6 million, compared to $69.3 million in 2024, showing stability in revenue generation [21] - Total operating expenses for Q4 2025 were $41 million, while for the full year, they were $202.9 million, reflecting a disciplined approach to cost management [21][22] - The net loss for Q4 2025 was $6.4 million, significantly reduced from a loss of $30.7 million in Q4 2024 [22][23] Business Line Data and Key Metrics Changes - The focus on ZYNLONTA has led to a refined go-to-market model, maintaining its position in the third-line plus DLBCL setting despite increased competition from bispecific therapies [5][6] - The company anticipates significant growth opportunities in the second-line plus DLBCL setting with LOTIS-5, expecting to share top-line data in Q2 2026 [8][10] Market Data and Key Metrics Changes - The treatment landscape for DLBCL is evolving, with a current 60/40 split between complex therapies and broadly accessible therapies, impacting market dynamics [15] - The company estimates that achieving a 10% market share in the second-line setting could translate to an additional $200 million to $300 million in revenue [20] Company Strategy and Development Direction - The strategic plan focuses on optimizing lifecycle management for ZYNLONTA, including advancing LOTIS-5 and initiating LOTIS-7 [5][6] - The company aims to establish ZYNLONTA as a backbone therapy in DLBCL, targeting peak annual revenues of $600 million to $1 billion with regulatory approvals and compendia listings [7][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's path forward, highlighting a strengthened balance sheet and a cash runway expected to last into 2028 [10][24] - The anticipated data catalysts in 2026 are expected to drive significant long-term growth, particularly with the LOTIS-5 and LOTIS-7 trials [25][26] Other Important Information - The company has successfully reduced its operating cost structure by approximately 50%, enhancing its strategic flexibility [5][6] - The amendment to the royalty purchase agreement with HealthCare Royalty reflects the company's confidence in ZYNLONTA's long-term value [9][10] Q&A Session Summary Question: How are PFS events tracking for LOTIS-5? - Management is confident in the Q2 timing for the top-line readout and will share primary and secondary endpoints at that time [29][30] Question: Is the $200-$300 million opportunity for LOTIS-5 conservative? - Management believes the profile seen in the safety run-in supports a meaningful role in the second-line plus DLBCL market, with potential for higher peak sales depending on clinical outcomes [34][35] Question: What is the expected R&D spend moving forward? - R&D expenses are expected to decrease in 2026 and 2027, assuming the current number of trials remains stable [42][44] Question: How will capital allocation priorities be managed? - The company is focused on driving ZYNLONTA growth and has allocated capital for ongoing trials and pre-launch activities [48][50] Question: What is the current commercial run rate for ZYNLONTA? - The company has maintained its market share despite increased competition, with expectations for significant sales growth following LOTIS-5 approval [58][59]

Financial Data and Key Metrics Changes - The company reported a full-year EBITDA of $111 million, an 11% increase over 2024, with an EBITDA margin of 37% [19] - The fourth quarter EBITDA margin reached a record 42%, the highest in the company's history [5] - The company is projecting 2026 EBITDA guidance of $112 million to $118 million, with a midpoint of $115 million representing low double-digit growth over 2025 [6][19] Business Line Data and Key Metrics Changes - The interactive business grew revenue and EBITDA by 53% and 60% respectively in the fourth quarter [4] - More than 80% of the company's revenue is recurring, indicating a stable revenue stream [9] - The digital business accounted for 51% of EBITDA in 2025 and is expected to grow to over 60% by 2027 [19][20] Market Data and Key Metrics Changes - The company is experiencing strong growth in the North American market, particularly with the launch of its Virtuals business with BetMGM [10] - iGaming is more than three times the size of sports betting in states where they compete head-to-head, presenting a significant opportunity for the company [12] Company Strategy and Development Direction - The company is focusing on an asset-light business model, which is positively impacting free cash flow and is expected to continue through 2026 [7][9] - The company plans to combine its gaming and remaining leisure businesses into one reporting entity called Retail Solutions, simplifying its story and reflecting its current management structure [20] - The company is targeting to de-leverage to 2.5-3 times net leverage by year-end 2026 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing momentum of the interactive business, with no signs of slowing down [11][35] - The company is optimistic about the potential for additional states to legalize iGaming, which could significantly enhance growth [12] - Management noted that the impact of tax changes in the UK is manageable and that operators are adjusting their strategies accordingly [24][25] Other Important Information - The company launched a cloud-based lottery platform, which is expected to generate significant revenue in the coming years, particularly outside the U.S. [61][63] - The company is focused on maintaining strong relationships with key customers, which is crucial for contract renewals and product innovation [9] Q&A Session Summary Question: Impact of UK tax changes on guidance - Management indicated that UK operators are adjusting their RTP and bonusing structures to mitigate the impact of tax changes, and they feel comfortable with the expected outcomes [24][25] Question: Capital allocation strategy amid changing valuations - Management acknowledged the potential for share repurchase but emphasized a focus on deleveraging, while also considering stock valuations in their asset allocation [29][30] Question: Expectations for iGaming market share growth - Management noted that the momentum in the interactive business is expected to continue, with strong performance from major customers [36][38] Question: Retail strategies in response to tax changes - Management stated that operators are looking to balance online and retail business to mitigate tax impacts, with some lower-performing shops being taken over by independent operators [42][45] Question: Virtual Sports revenue expectations - Management acknowledged a mixed performance in Virtual Sports but expressed confidence in margin sustainability and ongoing revenue growth initiatives [46][49]