Financial Data and Key Metrics Changes - In Q3 2025, the company reported record revenues exceeding $4 billion, driven by strong customer growth and engagement [3][4] - Net income reached $783 million, marking a 39% year-over-year increase, with a return on equity (ROE) of 31% [23] - The cost-to-income ratio improved to 28%, reflecting enhanced operational efficiency [4][22] Business Line Data and Key Metrics Changes - The customer base grew to 127 million, with over 4 million net additions in the quarter, maintaining an activity rate above 83% [3] - Credit portfolio balances reached $30.4 billion, up 42% year-over-year, with secured lending growing 133% and unsecured loans increasing by 63% [15][16] - Loan originations hit a record high of $4.2 billion, up 40% year-over-year [16] Market Data and Key Metrics Changes - In Brazil, the company serves over 60% of the adult population and is the largest player in the SME segment by account numbers [5] - In Mexico, customer growth reached approximately 14% of the adult population, with RPAC levels nearing those in Brazil at $12.5 [6][46] - The cost of funding improved from 91% to 89% of interbank rates, demonstrating effective volume growth and efficiency [18] Company Strategy and Development Direction - The company aims to broaden its product portfolio and deepen customer engagement while executing a disciplined credit strategy [5][6] - A focus on becoming AI-first is emphasized, integrating AI into operations to enhance customer experiences and improve risk management [8][9] - The company is exploring opportunities in the U.S. following its filing for a National Bank Charter, while prioritizing growth in Brazil and Mexico [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the scalability of their model, highlighting strong customer engagement and unit economics [4][5] - The company anticipates continued growth in Mexico, with expectations of meaningful contributions to results in the coming years [6][72] - Management remains cautious about potential regulatory impacts in Mexico, particularly regarding proposed caps on card interchange fees [48][49] Other Important Information - The gross profit reached $1.8 billion, up 32% year-over-year, with a gross profit margin of 43.5% [22] - The liquidity metrics for the consumer credit portfolio in Brazil showed a 15-90 day NPL ratio of 4.2% and a 90-plus-day NPL ratio of 6.8% [20][21] Q&A Session Summary Question: Can you explain the lower provisions this quarter? - Management noted that asset quality has improved, with better-than-expected performance and recovery levels due to reactivating previously defaulted customers [26][27] Question: What explains the NIM contraction? - Management explained that the decline in net interest margin (NIM) was due to a shift towards less risky assets and increased interest expenses in Brazil, despite a decrease in funding costs as a percentage of interbank rates [33][34] Question: How is the rollout of the credit limit increase program performing? - Management indicated that the full effects of the credit limit increase program will materialize over time, with a focus on less risky customers [40][41] Question: What is the impact of the proposed cap on card interchange fees in Mexico? - Management expressed concerns that caps could inhibit financial inclusion and the unit economics of new customers, while remaining engaged in discussions with industry participants [48][49] Question: Will the company provide NPL data for Mexico? - Management confirmed that as Mexico's relevance in the credit portfolio grows, more granular disclosures on asset quality will be provided [52][53]

Financial Data and Key Metrics Changes - Year-to-date revenues were $23 million, down 22% year-over-year [7] - Q3 revenues of $8.8 million were down 38% year-over-year but represented an 18% sequential improvement over Q2 [11] - Gross profit was $10.9 million year-to-date, down 10% against the same period last year [9] - Gross margins for the nine-month period were 47.3%, up 6.4 percentage points versus the prior year period [10] - Adjusted EBITDA losses narrowed to below $2 million for the third quarter [15] Business Line Data and Key Metrics Changes - Software and services revenue comprised over 50% of total revenue, contributing to gross margin expansion of over 640 basis points [3] - Software and services revenues made up 57% of total revenues in Q3, an 11 percentage point mix shift [11] - Annualized contract value of renewable software was $10.2 million, down 10% compared to 12 months ago [8] - Net dollar revenue retention of customers with at least $50,000 of ACV was 77% [8] Market Data and Key Metrics Changes - The company has secured deployments in Italy, Bulgaria, Poland, and additional locations across the Middle East [5] - CTE customers drove 49% of bookings value, up from 41% in the prior year comparable period [12] Company Strategy and Development Direction - The company is focusing on advancing its strategy and controlling internal factors while navigating external headwinds [3] - AI is being leveraged to eliminate language barriers and expand global reach [4] - The company is cautiously optimistic about the long-term growth potential despite ongoing uncertainties in the U.S. education funding environment [6] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the fourth quarter due to ongoing uncertainties related to tariff impacts and education funding [6] - The government shutdown has created delays in purchasing and funding decisions for customers [19] - Management remains confident in the ability to improve the quality of both hardware and software revenues [16] Other Important Information - The integration of Second Avenue Learning has led to the launch of the Career Explorer application [4] - The company is managing stock-based compensation to a target burn rate of less than 7% for the full year [14] Q&A Session Summary Question: Impact of government shutdown on zSpace - The government shutdown has created obstacles for end users in making purchasing and funding decisions, leading to delays in accepting shipments and concluding purchase orders [19][20] Question: Recent wins and deployments - The deployment in Danbury School District is focused on middle and high schools, with potential for broader district-wide implementation [28] Question: Net dollar revenue retention and customer renewals - The decline in net dollar revenue retention is attributed to two large customers who could not fully renew their commitments due to budget constraints [32] Question: International segment contribution and tariff challenges - The international segment is seeing strong demand, with a focus on expanding partnerships in Italy, Bulgaria, and Poland [51] - Tariffs have had a modest impact on gross margins, primarily affecting the sales motion earlier in the year [53] Question: New hardware and margin trends - A new stylus is expected to enhance user experience and simplify logistics, contributing to future margin improvements [60]

Financial Performance Highlights - Collections for Q3 2025 were $237 million, up 63% year over year, driven by strong deployment growth [3][9] - Revenue for the quarter was $151 million, reflecting a 36% increase compared to the prior year [3][18] - Adjusted EPS for the quarter was $0.74, with a cash efficiency ratio of 72.2% [4][13] - LTM-adjusted cash EBITDA reached $727 million, improving leverage to 1.59 times [4][20] Business Line Performance - The Conn's portfolio purchase contributed $50 million to collections for the quarter [9] - Portfolio purchases for the quarter totaled $151 million, up 22% year over year [10] - Estimated remaining collections (ERC) as of September 30 were $2.9 billion, up 27% year over year [10] Market Trends - Elevated delinquency trends across non-mortgage consumer asset classes are creating favorable portfolio supply trends [5][8] - Personal savings levels have decreased to $1.1 trillion, lower than pre-pandemic averages, indicating limited consumer ability to absorb financial hardships [6] - An increase in insolvencies in both the U.S. and Canada has fueled a resurgence in supply of insolvency portfolios [7][8] Company Strategy and Industry Competition - The company is focused on acquiring dislocated consumer credit assets, with the Blue Stem portfolio purchase expected to close in Q4 2025 [4][14] - The company aims to maintain a competitive advantage through proprietary data and advanced analytical capabilities [12][63] - The company is well-positioned to capitalize on market opportunities due to its specialized expertise in hard-to-value asset classes [17][63] Management Commentary on Operating Environment and Future Outlook - Management remains bullish on investment opportunities, citing elevated consumer delinquencies and charge-offs as drivers for robust portfolio supply [8][10] - The company expects to continue strong collection performance on existing and future portfolio purchases [10][20] - Management highlighted the importance of maintaining a strong liquidity profile to support growth and strategic options [22] Other Important Information - The board declared a quarterly dividend of $0.24 per share, representing a 5% annualized yield [23] - The company completed an amendment of its senior secured revolving credit facility, increasing capital commitments to $1 billion [4][21] Q&A Session Summary Question: Any details on the seasonality of collections across diversified channels? - Management noted that U.S. collections peak during tax season from February to April, while the fourth quarter typically sees the largest deployments across all geographies [25][28] Question: How should court costs be viewed in the coming quarters? - Management indicated that court costs of $15 million for the quarter may remain elevated, with a run rate expected to be similar for 2026 [29] Question: Any noteworthy trends in the portfolio purchases? - Management highlighted a continuing growth in insolvencies, with elevated opportunities across all asset classes [36] Question: What is the expected cash flow contribution from Blue Stem? - Management confirmed that Blue Stem's cash flows would have a similar rapid pace of collections as Conn's [41] Question: Are there opportunities in the auto sector due to increased delinquencies? - Management acknowledged increased activity in the auto sector, particularly in the non-prime segment [43] Question: What is the outlook for leverage and capital allocation? - Management indicated that leverage could decrease further, with potential changes to dividends or share repurchases being considered [66][68]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenue of $200,000, a significant decrease from $2.4 million in Q2 2025, reflecting the transition to the Energy Base platform [11] - GAAP cost of revenues totaled $4.9 million, while operating expenses were $5.1 million, indicating a commitment to disciplined cost control [11] - The net loss for the quarter was $10.4 million, or $0.73 per share, with cash, cash equivalents, and short-term investments at $3.5 million, excluding $30 million from a financing that closed after the quarter-end [11][12] Business Line Data and Key Metrics Changes - The company is transitioning from Energy Warehouse and Energy Center deliveries to the Energy Base platform, which will be the foundation of future commercial activity [11] - The Energy Base offering currently provides a 10-hour duration, with plans to target a 16-hour battery by 2029 [18] Market Data and Key Metrics Changes - The company has established strong relationships with tier-one customers, including SB Energy, Honeywell, and Portland General Electric, validating its technology for real-world deployment [5][6] - The commercial pipeline is strong, with 100% of active opportunities centered on the Energy Base platform, indicating increasing RFP activity and proposal volume [9] Company Strategy and Development Direction - The company aims to deliver on customer commitments, execute with discipline, and convert momentum into long-term growth [14] - A focus on operational discipline, scaling manufacturing capability, and demonstrating technology performance is emphasized as the company prepares for the next phase of growth [9][12] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of long-duration storage in a decarbonized and resilient grid, with a clear strategy to deliver projects similar in size to the SRP pilot project [9][18] - The company plans to host an Investor Day in early 2026 to provide an in-depth look at progress and future roadmaps [10] Other Important Information - The company completed a $40 million financing with Yorkville Advisors, reinforcing its balance sheet and providing flexibility for future operations [6][12] - A $75 million at-the-market equity program is being launched to support growth and execution as needed [8][12] Q&A Session Summary Question: Scale of Energy Base projects and competing technologies - The company is pursuing projects similar in size to the SRP project, targeting larger opportunities in the future, with a current offering of 10-hour duration batteries [18] - Competing technologies include those offering more than 10 hours of storage, with recognition of the need for longer-duration solutions [19] Question: Types of customers issuing RFPs - Customers issuing RFPs are primarily utilities or Independent Power Producers (IPPs) acting on behalf of utilities, with no engagement in behind-the-meter RFPs for data centers [20] Question: Use of proceeds from capital raised and liquidity needs - The company has approximately $30 million in cash and the ability to draw an additional $10 million, providing significant flexibility to manage liquidity [21][22]

Financial Data and Key Metrics Changes - The company achieved record highs with income from operations of $4.4 million and GAAP net income of $6.6 million, resulting in net income per common share of $0.26 and $0.05 on a basic and diluted basis respectively [18][30][31] - The company started the quarter with $45.5 million invested in HYPE tokens and purchased an additional $20.0 million worth of HYPE, recognizing GAAP accretion of $7.1 million [18][30] - Adjusted EBITDA for the quarter was $8.0 million, reflecting the removal of non-recurring items and stock-based compensation [31][32] Business Line Data and Key Metrics Changes - Revenue from digital assets businesses exceeded $300,000, significantly higher than less than $2,000 in Q3 2024, driven by staking rewards, validator commissions, and the first HOUSE agreement with Credo [19][25] - The company launched its proprietary HYPE Asset Use (HOUSE) platform, generating fee income while allowing clients to unlock unique utility on Hyperliquid [13][14] - The company’s validator received over $3 million tokens delegated from the Hyperliquid Foundation, with a total of 13.2 million HYPE tokens delegated as of October 31, representing 60% month-over-month growth [15][24] Market Data and Key Metrics Changes - Hyperliquid is the leading decentralized perpetuals exchange with over 60% market share as of October 31, 2025, and daily average revenues exceeding $3 million [16][38] - Daily trading volume on Hyperliquid exceeds $12 billion, with cumulative cryptocurrency perpetuals trading volume exceeding $3 trillion since inception [7][16] - Hyperliquid generates annualized revenue of approximately $1.3 billion based on an observed run rate of $3.5 million per day [6][16] Company Strategy and Development Direction - The company is focused on building a strategic HYPE token treasury and expanding its portfolio of DeFi services while developing institutional infrastructure to bridge traditional finance and decentralized finance [4][11][59] - The company aims to create long-term shareholder value through multiple pathways, including direct exposure to HYPE token appreciation and recurring revenue from DeFi services [11][12] - The company is committed to maintaining transparency and accountability while operating at the forefront of financial innovation [28][29] Management's Comments on Operating Environment and Future Outlook - Management believes the macro environment for institutional DeFi adoption is improving, with increasing regulatory clarity and maturing institutional infrastructure [58][59] - The company anticipates continued growth in DeFi-related revenues and expects operating cash flow to turn positive in 2026 [38][40] - Management expressed confidence in the resilience of Hyperliquid's platform during market downturns, highlighting zero downtime during the October 10th liquidation event [42][43] Other Important Information - The company continues to develop its proprietary OptiJet user-filled device and is on track for FDA registration [29][55] - The company has implemented comprehensive risk management frameworks to support its expanded activities in DeFi [28] - The company raised $21.8 million net of expenses via its At the Market Equity Offering Program, demonstrating ongoing fundraising capability [37] Q&A Session Summary Question: How did the crypto liquidation event on October 10th impact your business? - The company reported no operational impact from the event, as it had not taken on leverage positions with HYPE assets, and trading volumes quickly returned to Hyperliquid [42][43] Question: What do you think of recent regulatory developments and their impact on DeFi and your business? - Management views the current regulatory environment as favorable and anticipates continued clarity around crypto and DeFi interactions with existing financial infrastructure [43][44] Question: Are you considering an additional capital raise? - The company is focused on building and scaling its business rather than immediate capital raises, but it remains open to future fundraising opportunities based on market conditions [45][46] Question: Do you see Aster and Lighter as credible threats to Hyperliquid? - Management acknowledges competition but believes Hyperliquid's unique features and innovations position it favorably against new entrants [46][47] Question: Is MNAV a useful metric to you? - The company believes MNAV was relevant in earlier stages of digital asset treasuries but now focuses on a combination of asset value and future cash flows [48][49] Question: What measures do you take to secure your tokens? - The company employs self-custody infrastructure and multi-signature solutions to protect its HYPE assets [50] Question: Why have you not sold the OptiJet? - The company is taking a rational approach to commercialization, focusing on achieving FDA registration before making decisions [55] Question: Are you going to hire more people? - The company aims to remain lean while building a robust revenue-generating business line within DeFi, with future hiring contingent on growth needs [56][57]

Financial Data and Key Metrics Changes - The company announced a secured convertible debt facility with an initial close of $15 million, with the capacity for additional tranches up to a total of $90 million as needed [5][12] - The revenue and run rate adjusted EBITDA guidance remains unchanged, with expected revenues of $20-$30 million in 2026 and $100-$200 million in 2027, aiming for EBITDA adjusted run rate break-even in 2027 [12][13] Business Line Data and Key Metrics Changes - The company is focused on scaling up PET cap production, with significant progress in manufacturing capacity build-out and product development [8][15] - The Cap farmer deployment schedule is on track, with factory acceptance testing expected to be completed by the end of 2025 [8] Market Data and Key Metrics Changes - The company is executing a water-first go-to-market strategy, with strong customer demand for PET caps in the water and carbonated soft drink (CSD) markets [9][40] - The first order from Berlin Packaging has been placed, marking a significant step in expanding market reach [10][24] Company Strategy and Development Direction - The company aims to dominate the PET cap market by leveraging its technology and expanding production capacity [15] - The strategic review engagement with RVC Capital Markets is progressing well, indicating potential future developments [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for PET caps driven by sustainability efforts and recycling initiatives [39][40] - The company is optimistic about the capacity being brought online and the potential for new product features to access larger customer segments [43][44] Other Important Information - The company settled securities litigation with no finding of liability, allowing it to focus on core business operations [13][14] - The company has made significant progress in addressing challenges related to impact resistance and stress testing for cap designs [10] Q&A Session Summary Question: Can you describe the milestones necessary for future funding from the convertible debt? - Management indicated that details will be provided in the upcoming 8K filing, suggesting a comprehensive understanding of the terms is necessary [17][18] Question: What is the outlook for the burn rate in the next couple of quarters? - The burn rate for Q3 was $15 million, with expectations of a similar rate moving into 2026, split between operating expenses and capital expenditures [19][20] Question: When will lines two and four be generating acceptable product quality? - Management is optimistic about making significant progress by the end of Q1 2026, although specific customer timelines cannot be committed to at this point [21][23] Question: Can you provide details on the first order from Berlin Packaging? - The first order is for a water application, and management is eager to learn from customer feedback once the order is fulfilled [24][25] Question: What developments have come from recent trade shows? - While concrete developments are not ready for external communication, there has been increased inbound interest from potential customers [41][42]

Financial Data and Key Metrics Changes - Net revenue for Q3 2025 was $16,000, a decrease from $29,000 in the same period last year [17] - Total operating expenses for the quarter were $9.0 million, slightly up from $8.9 million in Q3 2024 [17] - Research and development expenses decreased to $3.3 million from $3.5 million, attributed to lower clinical study costs [17] - Selling, general, and administrative expenses increased to $5.7 million from $5.4 million, reflecting investments in commercial activities [18] - Net loss for the quarter was $7.8 million, down from $7.9 million in Q3 2024 [18] - Cash, cash equivalents, and available-for-sale securities totaled approximately $102.4 million as of September 30, 2025 [18] Business Line Data and Key Metrics Changes - The company is focusing on the PreTRM test adoption, with significant progress in commercialization efforts [4][6] - The first Medicaid pilot program in Nevada is actively enrolling patients, indicating initial traction in the market [7][12] Market Data and Key Metrics Changes - The company is targeting six initial states, representing approximately 33% of U.S. births and 35% of Medicaid births annually [8] - Engagement with 10 payers across 13 states is underway, indicating a diverse mix of national and regional opportunities [12] Company Strategy and Development Direction - The company is executing a geographically focused strategy to enhance coverage, physician education, and patient awareness [4] - A two-prong approach is being utilized for commercialization: targeting state engagement and payer-driven adoption through pilots [9][10] - The company aims to establish the PreTRM test as a standard of care for preterm birth risk [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the commercial momentum and the potential for significant growth opportunities [18] - The timeline for guideline inclusion is estimated to be 24-36 months post-publication of the PRIME study results [31] Other Important Information - The company plans to publish full results of the PRIME study in a peer-reviewed journal by the end of the year [5] - Key leadership appointments have been made to strengthen the team and drive the adoption of the PreTRM test [14][15] Q&A Session Summary Question: Progress on Medicaid pilots and timeline for additional pilots - Management confirmed they are on track with one pilot launched and another in contracting, with discussions ongoing for additional pilots [22] Question: Economics of the Nevada pilot and payment structure - The pilot size is expected to be a few hundred patients, with discussions for value-based healthcare arrangements ongoing [24] Question: Timing of PRIME publication and additional data - Management is confident the publication will be out before year-end and will provide new insights upon release [27][29] Question: Pathway to guideline inclusion and focus areas - The timeline for guideline inclusion remains 24-36 months, with a focus on geographic adoption and broader engagement with payers and providers [31][32] Question: Organizational readiness post-PRIME publication - The company has prepared for the publication with plans for payer engagement and dissemination of information to clinicians [38]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $11.5 million, down from $11.7 million in Q2 2025, with some revenue migration dilution due to technology platform migration [8][9] - Cash decreased to $10.3 million from $10.5 million at the end of Q2 2025, primarily due to the timing of customer payments [9] - Anticipated sequential decline in revenue and adjusted EBITDA for Q4 2025, but expected sales growth moving into 2026 [9][10] Business Line Data and Key Metrics Changes - Continued progress in launching new products and accelerating sales bookings to the highest levels of the year [6] - Focus on large vertical markets, delivering industry-specific AI solutions across various sectors including automotive, healthcare, and advertising [6][7] Market Data and Key Metrics Changes - The company is positioned to expand into a larger addressable market by selling bundled solutions that integrate insights, actions, and outcomes [21][14] - The potential combined company with Arcaneum could achieve a revenue run rate of approximately $15 million quarterly, growing in the 15%-20% range in 2026 [14] Company Strategy and Development Direction - The company aims to evolve from providing strategic analytics to delivering comprehensive AI-powered solutions that enhance customer acquisition and optimization [4][5] - The acquisition of Arcaneum is expected to create a vertically focused, AI-driven customer acquisition platform, enhancing market reach and strategic flexibility [13][14] Management's Comments on Operating Environment and Future Outlook - Management believes the company is at a positive inflection point, with significant opportunities for growth through AI-driven solutions [4][5] - The focus will be on maximizing revenue growth while maintaining positive adjusted EBITDA margins of 10% or more [22] Other Important Information - The agreement to acquire Arcaneum includes a $10 million convertible promissory note and an earnout based on performance metrics [11][12] - The anticipated closing date for the acquisition is in the first half of 2026, pending approval from disinterested stockholders [12] Q&A Session Summary Question: What is the TAM for the combined solution? - The addressable market for the combined company is expected to be multiples of the current market, with significant customer acquisition budgets tied to insights [21] Question: How does the company view the trade-off between growth and profitability? - The focus is on maximizing revenue growth while maintaining positive adjusted EBITDA margins, prioritizing customer penetration and scaling [22] Question: How does growth break down between new and existing customers? - The company believes it can achieve a $100 million revenue opportunity much sooner with the combined capabilities, leveraging existing customer relationships [23][24]

Financial Data and Key Metrics Changes - The company reported record quarterly revenue of $6.7 million for Q1 2026, a 46% increase compared to the same quarter a year ago [6][25] - Gross margins were 14.4%, up from 12.9% in the prior quarter but down from 26.6% in the same quarter last year [26] - The net loss for the quarter was $1.6 million, compared to a loss of $1.3 million in the year-ago quarter [27] Business Line Data and Key Metrics Changes - Production revenue was approximately $6 million, significantly up from $2.6 million in the year-ago quarter [25] - Aerospace program revenue reached $2.7 million, while the cystoscope program achieved $1.9 million [25] - Engineering revenue decreased to $656,000 from $1.6 million in the year-ago quarter [25] Market Data and Key Metrics Changes - The aerospace program revenue net of tariffs was $2.5 million, representing an 800% increase year-over-year [11] - The cystoscope program revenue was $1.5 million net of tariff reimbursements, an 180% increase year-over-year [13] - The Ross Optical Division saw a 10% revenue increase quarter-over-quarter, reaching over $1 million [16] Company Strategy and Development Direction - The company is focusing on expanding its presence in the defense and aerospace markets while maintaining its commitment to the medical device sector [33] - New product development programs are expected to ramp up, with two significant agreements recently signed [10][20] - The company anticipates fiscal year 2026 revenue to exceed $25 million, with a positive adjusted EBITDA of approximately $500,000 [10][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about ongoing higher top-line revenue and improving gross margins, indicating a transition to a new operational level [11][30] - The company expects significant increases in product development revenues in the upcoming quarters, driven by new orders and a recovering optical components market [26][19] - Management acknowledged challenges in ramping production but believes that improvements in infrastructure and processes will yield long-term benefits [9][30] Other Important Information - The company has made substantial progress in improving production efficiency and expects to see benefits from recent investments in infrastructure [15][30] - Cash at the end of September was approximately $1.4 million, with debt at $1.7 million [28] Q&A Session Summary Question: Is the company pivoting towards defense and aerospace applications? - Management clarified that while they are promoting themselves more in the defense aerospace marketplace, this is in addition to their medical device focus [33] Question: Can you discuss capacity utilization and revenue support? - Management indicated that facility updates are ongoing, and they expect to have sufficient capacity to double current production levels without significant additional costs [35] Question: Can you break out COGS in terms of labor versus materials versus overhead? - Management explained that different divisions have varying cost structures, with manufacturing having significant material costs and micro-optics being labor-intensive [39] Question: What is the cause for the delay in the legacy defense program reorder? - Management speculated that the delay might be related to government activities but confirmed they do not have definitive information [42] Question: What are the average lifespans of defense versus medical programs? - Management noted that medical devices typically last at least five years, while defense programs also tend to have long lifespans, often in the 5-10 year range [46][48]

Financial Data and Key Metrics Changes - For the first nine months of 2025, total revenues increased by 88% to just under $185 million compared to $98 million in the same period last year [25] - Adjusted EBITDA for the full year 2025 is expected to grow by 50%-75% compared to 2024 [14][33] - The company reported a net loss of $1.5 million for Q3 2025, compared to a net income of $2.6 million in the same quarter last year [25] Business Line Data and Key Metrics Changes - Revenue from procurement services totaled $31.1 million in Q3 2025, down from $60.5 million in the year-ago quarter, while year-to-date revenues from procurement services have more than doubled [16][25] - Systems integration revenue increased by 20% to $9.2 million in Q3 2025, driven by the integration of AI-enabled racks [17] - Facilities management revenue declined by 19% year over year to $1.6 million, but is expected to see a year-over-year increase in Q4 [10][17] Market Data and Key Metrics Changes - The AI data center market is expanding rapidly, with significant investments expected in AI infrastructure [11][12] - The company is well-positioned to capitalize on the first wave of AI-driven investment, indicating a strong demand for high-performance computing and hybrid systems [11][12] Company Strategy and Development Direction - The company is actively exploring strategic acquisitions, new partnerships, and portfolio expansion, particularly in AI and edge computing [14][33] - Investments in facilities and expertise are ongoing to meet the growing demand for high-density compute and efficient cooling solutions [12][13] - The company aims to capture a meaningful share of the rapidly growing AI infrastructure market [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting strong underlying demand and a growing pipeline [30] - The company expects a strong rebound in adjusted EBITDA in Q4, reflecting higher rack volumes in systems integration [14][33] - Management acknowledged challenges in Q3 but emphasized improvements in operational processes and communication [46][47] Other Important Information - The company raised capital through a secondary offering, strengthening its balance sheet and providing additional funds for strategic investments [13][27] - A new board member, Vivek Mahindra, was appointed, expected to enhance the company's strategic direction and customer base [31] Q&A Session Summary Question: Insights on end markets and enterprise demand - Management noted an uptick in enterprise activity and demand for complex CSP solutions, indicating a shift in customer needs [36][37] Question: Client base and public announcements - The company has multiple clients but does not disclose them publicly, focusing on operational execution instead [39][40] Question: Future capital raises - Currently, there are no plans for additional capital raises, with management emphasizing a focus on strategic growth without diluting investor value [39] Question: Mixed vendor rack integration - Management indicated that while mixed vendor integration is a small part of the business, it is handled confidentially to maintain customer relationships [42][43] Question: Operational requirements affecting rack volumes - Management acknowledged that power availability and ERP integration issues impacted Q3 volumes but expressed confidence in resolving these challenges [45][46] Question: Guidance for 2026 - Management provided initial guidance of 40%-50% organic growth for 2026, citing improved visibility across business segments [49][50]