Financial Data and Key Metrics Changes - The company reported a strong income growth of 12%, with total income reaching GBP 16.4 billion, exceeding guidance of around GBP 16.3 billion [4] - Earnings per share increased by 27% to GBP 0.68, while dividends per share rose by 51% to GBP 0.325 [3] - The cost-income ratio improved to 48.6%, down 4.8 percentage points from the previous year [11] - The return on tangible equity was reported at 19.2% [3] Business Line Data and Key Metrics Changes - Customer loans increased by 5.6% to GBP 392.7 billion, driven by growth in mortgages and unsecured lending [6] - Customer deposits rose by 2.4% to GBP 442 billion, with retail banking deposits increasing by 4% [7] - Assets under management (AUM) grew by nearly 20% to GBP 58.5 billion, with net flows up 44% [8] Market Data and Key Metrics Changes - The company added 1 million new customers during the year, indicating broad-based growth across its three business lines [2] - The net interest margin improved by 21 basis points to 234 basis points, primarily due to deposit growth and margin expansion [4] Company Strategy and Development Direction - The company aims to focus on disciplined growth, emphasizing returns and customer engagement [34] - Plans include leveraging simplification and investing in AI to enhance productivity and customer experience [34] - The target is to grow customer assets and liabilities at an annual rate greater than 4% from 2025 to 2028 [35] Management's Comments on Operating Environment and Future Outlook - The management expects moderate growth in the macro environment for 2026, with unemployment peaking at manageable levels [11] - The guidance for 2026 includes income in the range of GBP 17.2 billion to GBP 17.6 billion, with a loan impairment rate expected to be below 25 basis points [33] Other Important Information - The company successfully completed its 2025 funding plan with GBP 7.1 billion in benchmark issuance [15] - The CET1 ratio was reported at 14%, up 40 basis points from the previous year, reflecting strong capital generation [17] Q&A Session Summary Question: How does the company view risk appetite and RWA optimization? - The company executed five SRT transactions in 2025, optimizing GBP 4.6 billion of RWAs, and plans to continue this strategy in 2026 and 2027 [37][38] Question: What is the rationale for the impairment change guidance? - The guidance for 2026 is set at less than 25 basis points, reflecting a normalization in impairments and growth in the loan book, particularly in unsecured lending [72] Question: Will the company increase lending in private banking and wealth management? - The company expects some increase in RWAs due to the Evelyn acquisition but remains comfortable with the current density levels [78][84]

Financial Data and Key Metrics Changes - Revenue grew 84% year-over-year, reaching $5.1 million for the quarter [4][8] - Net income reported at $6.8 million, marking a significant improvement [9] - Stockholders' equity turned positive to $21.7 million, an increase of nearly $60 million since year-end 2024 [4][9] - Total assets increased to $77.6 million from $60.9 million as of June 30, 2025 [9][10] - Cash and restricted cash totaled $46.2 million, including $23.1 million in cash and cash equivalents [10] Business Line Data and Key Metrics Changes - Commissions were the largest revenue contributor at just over $3 million for the quarter, with clearing fees and stock locate-related activity also contributing meaningfully [8] - The operational performance of Wilson-Davis as the core clearing engine showed continued strength across commissions and clearing-related activities [6][8] Market Data and Key Metrics Changes - The current market environment is becoming increasingly constructive, with greater engagement from broker-dealers and financial institutions seeking efficient operations and modernized infrastructure [4][5] - Firms are expanding their focus beyond traditional equities into a wider range of products and services, emphasizing flexibility and capital efficiency [4] Company Strategy and Development Direction - The company aims to build a modern, technology-enabled financial infrastructure platform for smaller and mid-sized institutions [3] - Priorities include enhancing the client experience, scaling responsibly, and advancing the full AtlasClear vision, including the proposed acquisition of Commercial Bancorp of Wyoming [11][12] - The strategy focuses on execution, delivering for clients, and thoughtful expansion to support long-term growth [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position entering 2026, highlighting a strengthened balance sheet and operational momentum [13] - The focus is on enhancing the core clearing business with smarter technology and improving connectivity across workflows [13][14] - The regulatory environment is perceived to be improving, potentially accelerating the approval process for the Commercial Bancorp acquisition [24][29] Other Important Information - The company has simplified its capital structure, with approximately 150 million shares outstanding and potential dilution from warrants and convertible notes [15] - Regulatory capital requirements are being met, with a focus on maintaining sufficient liquidity for operations and growth [16] Q&A Session Summary Question: What does the fully diluted share count look like today? - The current outstanding share count is approximately 150 million shares, with potential additional shares from warrants and convertible notes [15] Question: How should investors think about true corporate liquidity versus regulatory capital? - The company maintains a regulatory capital threshold of $10.5 million and aims to keep net capital above $15 million [16] Question: At what revenue level does the clearing business begin to generate consistent operating leverage? - The threshold for operating leverage is around $14 million in operating costs, beyond which the company expects significant scaling [17][18] Question: Can you provide clarity on the expected ramp timeline for new introducing brokerage firms? - The company is optimistic about onboarding new correspondent clearing clients quickly, with measurable impacts on revenue expected in the coming quarters [20][22] Question: What is the status of the proposed Commercial Bancorp acquisition? - The company is preparing to file for regulatory approval, with expectations for a quicker approval process than initially anticipated [23][24][29]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 2025 was $0.52 per share, exceeding the base dividend of $0.46 per share, resulting in a base dividend coverage of 113% [5][6] - Full year 2025 adjusted net investment income per share was $2.18, representing an operating return on equity of 12.7%, exceeding the top end of guidance [7][8] - Reported net asset value per share at year-end was $16.98, down from $17.11 in Q3 and $17.09 at year-end 2024 [20][34] Business Line Data and Key Metrics Changes - In Q4, 97% of investments were in first lien loans, indicating a commitment to investing at the top of the capital structure [27] - Total commitments in Q4 were $242 million, with total fundings of $197 million across five new portfolio companies and upsizes to four existing investments [26] - The weighted average yield on debt and income-producing securities at amortized cost decreased from 11.7% to 11.3% quarter-over-quarter [28] Market Data and Key Metrics Changes - The weighted average loan-to-value (LTV) within the portfolio was approximately 41%, remaining stable year-over-year [15] - The core portfolio companies demonstrated LTM revenue and earnings growth rates of approximately 9% and 12%, respectively [16][17] - The company’s liquidity represented approximately 33% of total assets, with nearly 6 times coverage on unfunded commitments [18][19] Company Strategy and Development Direction - The company is focused on maintaining a disciplined investment strategy, particularly in a tighter spread environment, and aims to capitalize on market volatility [24][25] - The establishment of a joint venture, Structured Credit Partners, aims to invest in newly issued broadly syndicated loan CLOs, enhancing diversification and expanding investment flexibility [40][41] - The company emphasizes a thematic investment approach, rotating capital to businesses with strong moats that can benefit from technological advancements, particularly in AI [50][52] Management's Comments on Operating Environment and Future Outlook - Management believes the investment environment for 2026 will be characterized by an imbalance between the supply of private capital and the demand for financing, leading to sustained competition and tight spreads [24] - The company anticipates a gradual market-correcting rebalancing as capital migrates towards managers that can consistently earn their cost of capital [44] - Management expressed confidence in the resilience of the portfolio and the ability to generate differentiated risk-adjusted returns during periods of market instability [46] Other Important Information - The company reported total investment income of $108.2 million for Q4, slightly down from $109.4 million in the prior quarter [38] - The company’s average debt-to-equity ratio was 1.17x for the full year 2025, down from 1.19x in 2024 [35] - The company has a spillover income of $1.21 per share at year-end, which will be monitored closely as part of the distribution strategy [42] Q&A Session Summary Question: How much of the portfolio has turned over since 2022? - The company indicated that about 20%-25% of NAV is from pre-2022 vintages, with the majority of the portfolio originated post the rate hiking cycle in 2023 and 2024 [48] Question: How does the company see the deployment environment evolving with AI? - The company views itself as thematic investors, rotating capital to businesses that will benefit from AI advancements, focusing on those with strong moats [50][52] Question: Will the joint venture focus on BSL CLOs? - The joint venture will primarily involve broadly syndicated loans, with no management fees at the CLO or joint venture level, enhancing returns for shareholders [56][57] Question: What is the impact of unrealized losses on the portfolio? - Unrealized losses were primarily driven by credit spread impacts and specific reversals from portfolio companies, with a noted impact from a restructuring at IRG [73] Question: What is the company's outlook on spreads for new investments? - The company has seen stable spreads throughout 2025 and anticipates this stability to continue into 2026, with hopes for widening as capital reallocates in the sector [80]

Financial Data and Key Metrics Changes - Global system-wide sales declined by 8.3% in Q4 2025, primarily due to a decrease in U.S. sales and lower marketing spend [5][28] - Adjusted EBITDA for the quarter was $113.3 million, down $24.2 million compared to the prior year [6][31] - Adjusted EPS was $0.16 in Q4 2025, reflecting the challenges faced during the year [6][31] - For the full year 2025, global system-wide sales decreased by 3.5%, indicating a need for operational and marketing improvements [6][28] Business Line Data and Key Metrics Changes - U.S. same-restaurant sales fell by 11.3% in Q4 2025, driven by reduced traffic and lower marketing effectiveness [28] - U.S. company-operated restaurant margins were 12.7%, a decline attributed to traffic decreases and inflation [31] - International business saw system-wide sales growth of 6.2% in Q4 2025, marking its 21st consecutive quarter of growth [5][30] Market Data and Key Metrics Changes - The international segment achieved an 8.1% increase in system-wide sales for the full year, with significant growth in regions like Asia Pacific and Latin America [9][30] - The company opened 59 new international locations in Q4 2025, contributing to a total of 159 new openings for the year [6][9] Company Strategy and Development Direction - The company is focused on Project Fresh, a turnaround strategy centered on brand revitalization, operational excellence, system optimization, and disciplined capital allocation [12][25] - The strategy aims to improve customer experience and franchisee economics while enhancing the quality of food offerings [12][25] - The company plans to prioritize everyday value offerings and innovate its menu, particularly in hamburgers and chicken products [16][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 was a challenging year but emphasized the importance of laying a foundation for future growth [6][11] - The outlook for 2026 anticipates flat global system-wide sales, with expectations for U.S. same-restaurant sales to improve as Project Fresh initiatives take effect [25][26] - Management expressed confidence in the brand's potential and the effectiveness of the turnaround plan, highlighting the importance of operational execution [40] Other Important Information - The company generated $205 million in free cash flow for the full year 2025 and returned $330 million to shareholders through dividends and share repurchases [10][32] - The company expects to close approximately 5%-6% of U.S. restaurants as part of its system optimization efforts, which will impact sales and EBITDA [22][69] Q&A Session Summary Question: How will marketing and menu initiatives evolve in 2026? - Management highlighted the importance of revitalizing the brand and improving operational excellence, with a new menu calendar framework to ensure consistent engagement with customers [44][46] Question: What insights were gained from the customer segmentation study? - The study validated the importance of quality and everyday upgrades, leading to a renewed focus on hamburgers and snacking occasions [55][57] Question: What is the current sentiment among franchisees regarding the turnaround strategy? - Franchisees appreciate the flexibility and communication from management, recognizing the need for collaboration to improve overall economics [74][75]

Financial Data and Key Metrics Changes - The company produced results at the high end of its 2025 guidance range, but guidance for 2026 reflects ongoing category challenges, inflationary pressures, and one fewer week in the fiscal year [4] - The company is conducting a comprehensive review of operations, including brand portfolio and financial strategy, to strengthen execution and position for top-line growth and margin expansion [4][10] Business Line Data and Key Metrics Changes - The traditional loaf segment, particularly the Nature's Own brand, has been underperforming, which has downstream effects on operating leverage [9][24] - The company is focused on reinvigorating the Nature's Own brand to generate demand and improve performance in the traditional loaf category [10][24] Market Data and Key Metrics Changes - The overall category is expected to be down 4%, with the company anticipating a rational approach to navigate headwinds [27] - The competitive environment remains normal, with no major uptick in bakery consolidation, and price per unit in the category has increased slightly due to a shift towards premium products [72] Company Strategy and Development Direction - The company is focused on navigating near-term challenges while laying the foundation for sustainable long-term growth [4] - A comprehensive review of capital allocation is underway, with a focus on maintaining a strong balance sheet and evaluating the dividend in light of the capital structure [13][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by inflation and changing consumer preferences, particularly in the traditional loaf segment [21][74] - The company is optimistic about the potential for growth in the Simple Mills brand, expecting double-digit growth next year despite recent disruptions [59] Other Important Information - The company is reviewing its supply chain and distribution network to enhance efficiency and reduce costs [47] - There is an ongoing evaluation of the brand portfolio, which may include potential divestitures, but no concrete plans are currently in place [50] Q&A Session Summary Question: Details on the comprehensive review of brands and operations - Management is in the early stages of a comprehensive review, focusing on brand portfolio support and areas needing investment, particularly in traditional loaf [8][11] Question: Capital allocation and dividend considerations - The company is reviewing its capital structure and dividend commitments, emphasizing the importance of shareholder value [12][30] Question: Stabilizing the traditional loaf market - Management believes that traditional loaf remains important, and they are focused on strategies to reinvigorate demand for Nature's Own [21][24] Question: Factors impacting the 2026 outlook - The company is considering various factors, including SNAP budget reductions and potential impacts from a Supreme Court case, in its 2026 guidance [34][37] Question: Supply chain review and potential bakery consolidation - The supply chain review includes evaluating production capabilities, but no major consolidation is currently planned [46][72] Question: Changes in brand investment strategy - The company has ramped up brand investment and innovation, particularly focusing on traditional loaf to address current market challenges [68][70]

Financial Data and Key Metrics Changes - In Q4 2025, revenue grew 43% year-over-year to nearly $2 billion, with Adjusted EBITDA reaching $343 million, four times the prior year period [4][13] - Adjusted EBITDA margin expanded by over 1,000 basis points year-over-year to 17% [4][13] - For fiscal year 2025, revenue increased 27% year-over-year to above $6 billion, and Adjusted EBITDA more than tripled to over $600 million [6][16] Business Line Data and Key Metrics Changes - Fantasy revenue increased as the Pick Six product began to scale [13] - Sportsbook revenue rose over 30% year-over-year, with Q4 revenue increasing 64% year-over-year to $1.4 billion [14] - iGaming revenue grew by 20% due to expanded offerings [14] - Lottery revenue benefited from a stronger jackpot environment and the rollout of new games [14] Market Data and Key Metrics Changes - Sportsbook handle increased 11% year-over-year to $54 billion, with a total potential payout across all open wagers reaching $2.5 trillion [15] - In January, Sportsbook handle increased 4% year-over-year, despite sportsbook-friendly outcomes [7][15] Company Strategy and Development Direction - The company is focusing on the predictions market as a significant growth opportunity, targeting hundreds of millions in annual revenue in the coming years [5][9] - Plans include integrating Railbird and launching a market-making division to enhance customer experience and liquidity [11][12] - The company aims to lead the predictions category and is optimistic about regulatory developments that support this growth [9][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model's efficiency and sustainability, expecting revenue and Adjusted EBITDA growth for many years [6][7] - The regulatory environment has improved, providing a stable backdrop for predictions, which is seen as a major growth area [20][21] - Management acknowledged the importance of customer acquisition and retention, with a focus on optimizing promotional strategies [38][39] Other Important Information - The company repurchased 16 million shares during fiscal year 2025 and plans to continue share repurchases as Adjusted EBITDA grows [4][16] - The company reported positive net income for the first time, indicating improved operational efficiency [16] Q&A Session Summary Question: Discussion on prediction markets and investment confidence - Management highlighted regulatory clarity from the CFTC as a key factor in their increased focus on prediction markets, viewing it as a significant growth opportunity [20][21] Question: Guidance on revenue deceleration - Management explained that the guidance reflects a conservative approach, with expectations of handle growth and net revenue margin improvements [24][25] Question: Revenue drivers for 2026 - Predictions are seen as an upside opportunity, with no revenue included in the guidance for 2026, focusing instead on customer acquisition costs [31] Question: Competitive environment and promotional intensity - Management characterized the current promotional environment as rational, with no significant uptick in promotional activity from competitors [70][85] Question: Legislative updates on prediction markets - Management noted that discussions around prediction markets are gaining traction in state legislatures, which could influence future legalization of online sports betting [72]

Financial Data and Key Metrics Changes - TC Energy reported a 13% year-over-year growth in comparable EBITDA for the fourth quarter, reaching nearly CAD 3 billion [13] - The company achieved a 9% year-over-year increase in comparable EBITDA for the full year 2025 [4] - The board declared a first quarter 2026 dividend of CAD 0.8775 per common share, marking a 3.2% year-over-year increase [20] Business Line Data and Key Metrics Changes - In Canada, EBITDA increased by CAD 110 million due to higher incentive earnings and flow-through depreciation [14] - In the U.S., EBITDA rose by CAD 188 million, primarily from the Columbia Gas settlement and additional contract sales [14] - In Mexico, EBITDA increased by CAD 163 million, a 70% increase year-over-year, attributed to the completion of Southeast Gateway [14] Market Data and Key Metrics Changes - North American natural gas demand is expected to increase by 45 Bcf/d from 2025 to 2035, equivalent to adding the entire European gas market over the next decade [5] - The company serves seven LNG facilities, representing 30% of North American LNG feed gas across Canada, the U.S., and Mexico [5] - Electricity demand in North America is projected to grow by 65% through 2050 [6] Company Strategy and Development Direction - TC Energy's strategy focuses on maximizing asset value through safety and operational excellence while leveraging commercial and technological innovation, including AI [22] - The company aims to prioritize low-risk, high-return growth, with a target of CAD 6 billion in net annual capital expenditures through 2030 [22] - The company is optimizing its capital plan by shifting CAD 500 million of capital forward into 2026 to capture in-year EBITDA [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver solid growth, low risk, and repeatable performance, supported by a strong project pipeline [23] - The company anticipates strong EBITDA momentum heading into 2026, with CAD 4 billion in projects expected to go into service [16] - Management highlighted the importance of maintaining financial strength and agility to support long-term value creation [22] Other Important Information - The company advanced CAD 5 billion of projects at various stages in the fourth quarter and placed CAD 2 billion of assets into service on time and under budget [6] - The pending approval portfolio now sits at about CAD 8 billion, with an additional CAD 12 billion of projects in origination [9] - Bruce Power's availability is expected to improve to the low 90s% range for 2026, contributing to financial performance [11] Q&A Session Summary Question: Can you provide insights on the balance sheet capacity for 2031? - Management indicated a deep pipeline of opportunities, with about CAD 12 billion in projects ranging from CAD 200 million to over CAD 1 billion [27] Question: What is the strategic rationale behind the Crossroads project? - The Crossroads expansion is primarily driven by power generation requirements, including data center demand and coal to gas switching [31] Question: Can you discuss the characteristics of the CAD 8 billion pending approval projects versus the CAD 12 billion in origination? - Pending projects are characterized as 90% or more likely to be sanctioned, while the origination projects are in earlier stages of development [57]

Financial Data and Key Metrics Changes - The company reported annual revenue of approximately CAD 3.5 billion in 2025, an increase of 11% compared to 2024 [14] - Adjusted EBITDA was about CAD 1.9 billion, reflecting a 26% increase from the previous year [14] - Adjusted net earnings reached just under CAD 630 million, representing a 115% improvement compared to 2024 [14] - The balance sheet remains strong, ending the year with approximately CAD 1.2 billion in cash and short-term investments, and CAD 1 billion in total debt [15] Business Line Data and Key Metrics Changes - In the uranium segment, the company produced 21 million pounds on a consolidated basis in 2025, exceeding revised annual guidance [15] - The fuel services segment delivered strong performance, including record UF6 production at Port Hope [16] - The company has commitments to deliver an average of about 28 million pounds of uranium annually over the next five years [13] Market Data and Key Metrics Changes - Long-term contracting volumes in 2025 remained below replacement rate levels, indicating a need for continued discipline in supply [12] - Average realized prices improved, reflecting a strengthening long-term market environment [14] - The company ended the year with approximately 230 million pounds committed under long-term contracts [14] Company Strategy and Development Direction - The company aims to maintain a disciplined approach to production and supply, focusing on long-term strategies despite market volatility [8][11] - Investments in next-generation enrichment and partnerships, such as with Westinghouse, are expected to enhance the company's position in the nuclear fuel cycle [10][18] - The company is strategically preserving uncommitted productive capacity to deploy as market fundamentals strengthen [14] Management's Comments on Operating Environment and Future Outlook - Management highlighted ongoing geopolitical turmoil and market volatility but emphasized resilience and disciplined execution as key themes for 2025 [8] - The outlook for growth across the nuclear fuel cycle is expected to continue, driven by electrification, decarbonization, and energy security priorities [19] - The company anticipates producing between 19.5 million and 21.5 million pounds of uranium in 2026, with an average realized price between CAD 85 and CAD 89 [21] Other Important Information - The company is actively negotiating contracts to unlock value while preserving significant uncommitted volumes for future pricing opportunities [12][13] - The investment in Westinghouse is expected to yield strong performance, with an outlook for adjusted EBITDA from Westinghouse of approximately CAD 370 million to CAD 430 million in 2026 [22] Q&A Session Summary Question: Guidance framework for Westinghouse business - Management discussed the exciting opportunities in Westinghouse and the potential financial impact of projects, emphasizing a disciplined approach to guidance [28][32] Question: Average realized pricing outlook for uranium - Management explained the lack of immediate price appreciation is due to a disciplined marketing strategy, preserving pounds for when demand increases [34][36] Question: Production outlook at McArthur River - Management addressed delays at McArthur River and the decision to pace production according to market demand, emphasizing a systematic approach [50][52] Question: Technical risks around McArthur River - Management confirmed that risks are being managed proactively and that the current issues are not indicative of a riskier environment [62][64] Question: Future demand and production backfill - Management expressed confidence in the demand for uranium and the ability to prepare assets for future production needs [68][70] Question: Conversion market contracting - Management highlighted the importance of securing long-term contracts in the conversion market and the strategy to maximize value over time [78][80]

Financial Data and Key Metrics Changes - Revenue for the fiscal quarter increased 105% year-over-year to $2.2 million, compared to $1.1 million for the same period last year [6][18] - Gross profit increased to $300,000, compared to a gross loss of $200,000 for the same period last year [19] - Net loss attributed to common stockholders was $7.3 million, or a loss of $0.85 per share, compared to a net loss of $13 million, or a loss of $2.96 per share in the prior year [21] Business Line Data and Key Metrics Changes - The core business, specifically the LungFit PH system, has seen significant adoption with over 45 hospitals now utilizing the first-generation system [6][8] - Customer retention exceeds 90%, with more than half of customers under multi-year agreements [7] Market Data and Key Metrics Changes - The company has expanded its international distribution network to 40 countries, with new agreements in Canada, Germany, Brazil, Austria, the Netherlands, and Sri Lanka [11] - The company is actively engaging with federal healthcare systems, having completed its first sale to a VA Medical Center [10] Company Strategy and Development Direction - The company has made a strategic decision to sell its Neuronas subsidiary, which is expected to provide up to $32.5 million in upfront payments and equity in the acquiring company [5][16] - The focus remains on expanding the utilization of the first-generation LungFit PH system while preparing for the anticipated FDA decision on the second-generation system [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the business, citing strong customer feedback and a dedicated team [12] - The company is optimistic about the FDA approval timeline for the second-generation system, with ongoing communication indicating no major hurdles [42] Other Important Information - The company completed a $5 million financing in January 2026, which, along with other funding sources, is expected to support operations into 2027 and potentially profitability [17][23] - Operating expenses were reduced to approximately $6.9 million, down from $10.7 million for the same period last year, reflecting cost reduction initiatives [19][20] Q&A Session Summary Question: How does the company penetrate systems rather than a single hospital at a time? - The product is offered through the ECAT system, which simplifies access for customers and allows competition with other RFPs [28][30] Question: How does the company identify facilities most likely to acquire the system? - The company focuses on refining its commercial organization and utilizing prospecting tools and CRM systems to identify and engage potential customers [31][32] Question: Has there been any change in the length of the sales cycle? - The sales cycle remains around six to nine months, with efforts to identify customers early in their contract processes [33][34] Question: How does the company segment the next-generation system market? - The focus is currently on the first-generation product, with discussions about the next-generation system being more future-oriented [36] Question: What is the status of communications with the FDA regarding the second-generation system? - The company has had constant communication with the FDA and is confident in the timeline for approval [41][42] Question: What recent wins or catalysts are there on the international side? - The company has seen recent wins and is starting to receive reorder requests for filters from customers, indicating product deployment success [47] Question: What attracted XTL Biopharmaceuticals to the Neuronas opportunity? - The science behind the Neuronas opportunity and the clear path to human studies were key factors in attracting XTL [52][54] Question: How did COGS perform in the quarter and what are the expectations for the future? - COGS is expected to be in the 60% range for Gen 1 and move towards 70% for Gen 2 as the company scales [57][58] Question: How sensitive is the sales cycle to increasing SG&A? - Increasing SG&A could potentially translate into more revenues, but the relationship is complex and requires careful management [62]

Financial Data and Key Metrics Changes - In Q4 2025, sales increased by 2% to $10.8 billion, despite a 1% decline in global production [8][12] - Adjusted EBIT margin expanded by 100 basis points to 7.5%, with adjusted EBIT increasing by 18% to $814 million [8][14] - Adjusted EPS rose by 29% to $2.18, and free cash flow exceeded $1.3 billion, significantly higher than in 2024 [8][12] - For the full year, sales were $42 billion, down slightly due to softer volumes in North America and Europe, while adjusted EBIT margin rose by 20 basis points to 5.6% [9][12] Business Line Data and Key Metrics Changes - Three of the four segments posted higher sales year-over-year, with seating seeing an 8% increase, while complete vehicles declined by 10% [16] - Body exteriors and structures, as well as seating, showed strong increases in adjusted EBIT margin year-over-year [16][17] - Power and vision margins were negatively impacted by discrete items, but operational improvements are expected to drive margin expansion in 2026 [17] Market Data and Key Metrics Changes - Global light vehicle production was down 1% overall in Q4, with North America and China declining, while Europe saw an increase [13] - Magna's sales growth is expected to be near flat to up 3.5% in 2026, driven by new program launches and higher production in Europe [21] Company Strategy and Development Direction - The company is focused on operational excellence, which has contributed to margin expansion and is expected to continue delivering benefits in 2026 [10][27] - A disciplined approach to capital spending is emphasized, with plans to repurchase approximately 22 million shares in 2026 while maintaining financial flexibility [7][8] - The company aims to drive EPS growth alongside strong free cash flow, with a target of $1.6 billion to $1.8 billion in free cash flow for 2026 [7][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing their capital allocation strategy and achieving further EPS growth and strong free cash flow [27] - The outlook for 2026 includes expectations for adjusted EBIT margin expansion of 40-100 basis points and continued improvements in operating performance [7][22] - The company remains focused on shareholder value creation, having increased dividends for the sixteenth consecutive year [27] Other Important Information - The company achieved significant operational milestones in 2025, including securing 90% of its 2028 business and receiving a record 151 customer awards for quality and performance [9][10] - The company has built a unified digital architecture covering about 80% of its divisions, enhancing data visibility and operational efficiency [10] Q&A Session Summary Question: Guidance for outgrowth excluding complete vehicles - Management highlighted operational excellence activities and new program rollouts as key drivers for the expected outgrowth of 1%-4% [30][31] Question: Operational excellence and commercial recoveries - Management confirmed that operational excellence is a continuing journey with visibility on margin improvements, while commercial recoveries are expected to be neutral year-over-year [35][39] Question: Seating segment outlook and cost actions - Management reassured that no incumbent seating programs have been lost, and the seating segment remains core to the business despite some program roll-offs [43][46] Question: Free cash flow sustainability - Management indicated that the expected free cash flow of $1.6 billion-$1.8 billion is sustainable, supported by disciplined capital expenditures [49] Question: Ford recall and warranty impacts - Management confirmed that one recall matter has been resolved, while another is ongoing, impacting margins in the power and vision segment [51][59] Question: Growth in power and vision segment - Management attributed expected growth to new program launches and operational improvements, despite some margin declines in Q4 [60][62]