Financial Data and Key Metrics Changes - Fourth quarter revenues were $13.2 million, representing a 60% increase year-over-year, while full-year revenues were $45.2 million, reflecting a 53% increase compared to the previous year [6][26] - Gross margin for the fourth quarter improved to 87% from 85% in the prior year, driven by better manufacturing efficiency [24] - Net operating loss for the fourth quarter was $3.3 million, a significant decrease from $7.6 million in the prior year [25] - Adjusted EBITDA loss for the quarter was approximately $950,000, an improvement from a loss of $5.7 million in the prior year [25] Business Line Data and Key Metrics Changes - Revenue from the TriNav system for the full year was $45 million, a 53% increase compared to the previous year, primarily driven by increased sales in liver-directed therapies [26] - Research and development expenses decreased by $2.7 million for the year, largely due to the closeout of clinical trial expenses related to nelitolimod [27] - Sales and marketing expenses increased by $2.9 million for the year, attributed to higher performance-related compensation due to increased sales [28] Market Data and Key Metrics Changes - The total addressable market for liver embolization procedures is approximately $480 million, while the broader embolization market represents a $2.3 billion U.S. addressable market [15][16] - The introduction of a new CMS HCPCS code expanded coverage for simulation or mapping procedures, effectively doubling the reimbursable use of the technology [16] Company Strategy and Development Direction - The primary strategic priority is to expand sales and commercial infrastructure, with plans to double the commercial footprint and enhance clinical studies to validate the PEDD platform [9][10] - The company aims to launch TriNav Advance in the first half of 2026, which is expected to facilitate selective therapy delivery and enhance therapeutic delivery to tumors [15] - The company is focused on executing near-term milestones, including achieving annual revenue in the range of $60 million-$62 million for 2026 [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value of the PEDD platform and the growth opportunities ahead, despite the need for upfront investments affecting near-term revenue [10][11] - The company anticipates that the revenue cadence will build throughout 2026 as the commercial expansion and new product contributions progress [10] - Management highlighted strong physician engagement and interest in the PEDD platform, indicating a positive outlook for future adoption [10] Other Important Information - The company raised $46 million in gross proceeds through a public offering, which was oversubscribed and supported by experienced healthcare investors [8] - The company is preparing to release a consolidated clinical update for the nelitolimod program in the second half of 2026, focusing on presenting a complete dataset for potential partners [21] Q&A Session Summary Question: Contribution to growth in 2026 from liver versus non-liver - Management indicated that liver will still be the majority of revenue in 2026, with expectations for meaningful progress in new applications in the second half of the year [33] Question: Balancing growth cadence and EBITDA pathway - Management stated that specific timing or guidance on cash flow breakeven or adjusted EBITDA breakeven is not being provided at this time, as they are in the early stages of investing in commercial expansion [34] Question: Details on the sales organization structure after investments - Management confirmed that they are significantly doubling the size of the commercial organization and adding a layer of management to improve sales opportunities [38] Question: Growth expectations for mapping and simulation - Management expressed confidence in growth from mapping and simulation, particularly with the introduction of new products like TriNav XP and TriNav Advance [44] Question: Use patterns for the TriNav product portfolio - Management noted varied use patterns among physicians, with some preferring specific products while others seek access to the full portfolio for clinical flexibility [50]

Financial Data and Key Metrics Changes - For Q4 2025, the company recorded revenue of $6 million, a 43% increase from CAD 4.2 million in the same period last year [4][5] - Gross margin in Q4 2025 was 67%, down from 71% in Q4 2024, primarily due to product mix and introductory pricing in new markets [5][6] - The net loss for Q4 2025 was CAD 8.2 million or CAD 0.27 per share, compared to a net loss of CAD 4.9 million or CAD 0.20 per share in Q4 2024 [6] Business Line Data and Key Metrics Changes - Recurring revenue for Q4 2025 was $2.3 million, while one-time sales of capital equipment accounted for $3.7 million [4] - The company had 78 TULSA-PRO sites as of December 31, 2025, with a growing sales pipeline of 110 new systems in various stages of the sales process [22] Market Data and Key Metrics Changes - The company is seeing broader adoption of TULSA-PRO across both academic and community hospitals, driven by increased awareness of clinical benefits and established reimbursement pathways [22][24] - TULSA reimbursement was confirmed for 2026 at Urology level 7, with expectations for private insurance coverage decisions in the second half of 2026 [24] Company Strategy and Development Direction - The company aims to establish TULSA as a third distinct category in prostate cancer treatment, capable of treating the whole gland or specific regions while minimizing side effects [28][29] - Strategic partnerships with distributors in Saudi Arabia and Australia are expected to enhance market presence and sales [26][27] - The introduction of the TULSA-AI Volume Reduction module is anticipated to streamline BPH treatment and expand the total addressable market significantly [36][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitable growth, projecting a path to cash flow positivity as revenues grow and margins remain high [7][25] - The company expects to reach high double-digit to low triple-digit revenue growth in 2026, supported by new clinical data and product offerings [25][47] Other Important Information - The CAPTAIN trial, a significant clinical study, is set to present its first outcomes at the European Association of Urology meeting, which may influence reimbursement timelines [15][76] - The company is also exploring opportunities with its Sonalleve technology for treating conditions like adenomyosis and pancreatic cancer [43][44] Q&A Session Summary Question: Update on private payers and reimbursement - Management reported that the number of patients going through private payers is increasing, with typical payments between 1.5 to 2.5 times Medicare rates, and over 90% of rejections are being tracked for potential reversals [49][50] Question: Dynamics of non-capital revenue decline - Management noted that while there was a sequential decline in non-capital revenue, overall usage is increasing, and the mix is expected to shift towards recurring revenue as the install base grows [55][56] Question: Expectations for 2026 revenue growth - Management did not provide specific guidance but indicated confidence in achieving a range of 90% to 110% growth based on the number of new sites and product offerings [66][71] Question: Progress on TULSA installations - Management confirmed that installations are progressing well, with expectations for increased installations in the first quarter and throughout the year [85] Question: Use of the BPH module - At least 10 sites are currently using the BPH module, with expectations to increase to 30-40 sites by mid-year [92] Question: International expansion progress - Management highlighted growing interest in international markets and recent distributor agreements, with introductory pricing aimed at facilitating market entry [93]

Lineage Cell Therapeutics (NYSEAM:LCTX) Q4 2025 Earnings call March 05, 2026 04:30 PM ET Company ParticipantsBrian Culley - CEOIoana Hone - Head of Investor RelationsJill Howe - CFOJoseph Pantginis - Managing Director of Equity ResearchMayank Mamtani - Senior Managing Director and Group Head of HealthcareConference Call ParticipantsAlbert Lowe - Senior Research AnalystJack Allen - Senior Research AnalystNone - AnalystOperatorWelcome to the Lineage Cell Therapeutics 3rd Quarter 2025 Conference Call. At this ...

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $32.2 million, with full-year revenue totaling $109.4 million, reflecting strong performance [3][14] - Adjusted EBITDA for Q4 2025 was $12 million, and for the full year, it was $24.3 million, more than doubling year-over-year [3][16] - Gross margin increased from 68.1% in Q4 2024 to 74.8% in Q4 2025, attributed to a favorable product mix and channel partner strategy [14][15] - Net income for Q4 2025 was $5 million, or $0.26 per diluted share, compared to a net loss of $0.1 million in Q4 2024 [16] Business Line Data and Key Metrics Changes - The company saw solid performance across both established clients and a growing number of mid-tier and long-tail life science companies, which are viewed as attractive for future growth [3][4] - Average revenue per top 20 pharmaceutical manufacturer declined slightly from $3 million in 2024 to $2.8 million in 2025, primarily due to lower buy-ups [18] Market Data and Key Metrics Changes - The company is experiencing a broader pause in spending across its client base, particularly among those involved in Most-Favored-Nation negotiations [4][22] - The net revenue retention rate remains strong at 116%, indicating effective customer retention despite market challenges [18] Company Strategy and Development Direction - The company is focused on transitioning more customers to a subscription-based model to enhance revenue predictability and establish a consistent recurring revenue component [89] - A $10 million share repurchase program has been authorized, reflecting confidence in the long-term value of the business [7] - The company aims to leverage AI to enhance operational efficiency and marketing execution, positioning itself as a strategic partner rather than a commoditized software solution [8][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that current market softness is temporary and expects normalization in client spending in the coming months [4][5] - The guidance for 2026 has been updated to reflect a more conservative revenue outlook, with expected revenue between $109 million and $114 million [5][18] - Management believes there is significant opportunity for value creation, particularly in the mid-tier and long-tail segments of the market [5][46] Other Important Information - The company achieved Rule of 40 performance and generated nearly $19 million in free cash flow from operations in 2025 [6][17] - The company is uniquely positioned with a comprehensive commercialization platform that integrates advanced patient-finding capabilities [11][12] Q&A Session Summary Question: Are you seeing conservatism across all clients or just those in MFN negotiations? - Management noted a broader pause across all clients as they digest the implications of MFN negotiations, leading to shorter contract durations [22] Question: Are there differences in spending pressure between DTC and HCP marketing? - Management indicated that spending pressure is consistent across both DTC and HCP marketing [23] Question: What drove the high gross margins in Q4 2025, and why are they not sustainable? - Management explained that the high margins were due to a favorable mix of channel partners and do not expect to maintain that level in 2026 [25][26] Question: How is AI impacting operations? - Management stated that AI is enhancing efficiency and allowing clients to reallocate budgets towards execution rather than content creation [28][29] Question: What is the current percentage of revenue under contract? - Management indicated that they are running approximately 15%-20% behind last year's contracted revenue numbers due to shorter contract durations [35][37] Question: How does the guidance for 2026 account for managed services? - Management clarified that the guidance includes very little from managed services, which is considered an episodic solution [40] Question: What strategies are in place to capture the mid-tier and long-tail market? - Management highlighted their ability to fill gaps for mid-tier clients lacking large marketing budgets, leading to faster-than-expected growth in that segment [45][46]

Financial Data and Key Metrics Changes - In 2025, the company achieved record revenue growth for the 40th consecutive quarter, with adjusted EBITDA growing approximately 35% to a record $9.1 million, representing a margin of 22% [4][18] - Q4 2025 revenue reached $10.5 million, an 8% increase from Q4 2024, and a 10% annualized increase from Q3 2025 [12] - For the full year 2025, revenue grew 15% to $40.3 million from $35.2 million in 2024 [12][18] - Net loss in Q4 2025 was $1.1 million or $0.08 per share, an improvement from a net loss of $1.5 million or $0.12 per share in the same period last year [17] Business Line Data and Key Metrics Changes - The partner and marketplace channel grew 8% year-over-year in Q4 2025, representing approximately 59% of ARR, with full-year revenue increasing 10% to $22.2 million [12][13] - The enterprise channel grew 8% in Q4 2025 and 21% for the full year, reaching $18.1 million, driven by expansion into the E.U. [13] - Annual recurring revenue (ARR) at the end of Q4 2025 was $40 million, a 9% increase over the previous year [14] Market Data and Key Metrics Changes - The company is experiencing increased litigation rates related to digital accessibility, with expectations that 2026 will see the highest number of digital accessibility lawsuits on record [7] - The E.U. market is expected to ramp up as enforcement of regulations increases, with significant deals in the pipeline [31] Company Strategy and Development Direction - The company is focusing on accelerating annual recurring revenue (ARR) growth while reducing reliance on non-recurring revenue [10][26] - A next-generation platform was launched to unify AI detection, expert audits, and custom fixes, enhancing transparency and legal protection [7][8] - The company aims to leverage proprietary data to drive innovation and improve accessibility solutions [9][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving at least 30% adjusted EBITDA growth in 2026, with expectations of a run rate adjusted EBITDA of $15 million by year-end [5][10] - The company anticipates that the regulatory environment will create significant demand for accessibility solutions [9][31] Other Important Information - The company repurchased approximately $1 million worth of shares in Q4 2025 and $4.6 million for the full year [18] - The balance sheet remains strong with $5.3 million in cash and $6.6 million in available debt facilities as of December 31, 2025 [19] Q&A Session Summary Question: Update on platform updates and human involvement in custom fixes - Management indicated that while AI tools are improving, significant human involvement is still necessary due to the complexity of accessibility issues [22] Question: Revenue guidance for 2026 and factors affecting it - Management noted that the guidance reflects a conservative approach, focusing on higher ARR growth and reducing non-recurring revenue [25][26] Question: Update on investments and opportunities in the E.U. - Management confirmed ongoing investments in the E.U. and a strong pipeline of deals, anticipating rapid demand growth as regulations are enforced [31] Question: Update on DOJ Title II enforcement - Management stated that DOJ requirements are set to go into effect soon, with strong momentum observed from partners in the federal sector [35] Question: Gross margin expectations for 2026 - Management expects gross margins to remain consistent, with potential for growth as AI compute costs are managed [36]

Financial Data and Key Metrics Changes - For fiscal 2025, revenue reached $560 million, exceeding guidance, while adjusted EBITDA was $70 million, landing in the upper half of the range [5][19] - Fourth quarter revenues decreased by 14% to $145 million, with grill revenues down 22% to $61 million, primarily due to elasticity and unfavorable mix shifts [21][22] - Adjusted EBITDA for the fourth quarter increased 6% to $19 million compared to $18 million in the same period of 2024, demonstrating operating leverage despite lower revenue levels [23] Business Line Data and Key Metrics Changes - Consumables revenues grew by 16% to $36 million, driven by higher unit volumes across wood pellets and food consumables [22] - Accessories revenues fell by 18% to $49 million, pressured by negative sales growth at MEATER [22] - The pellets business performed well, indicating strong consumer engagement and supporting long-term health and replacement outlook [9] Market Data and Key Metrics Changes - The outdoor grilling market has seen modest declines, with unit volumes still down significantly compared to pre-pandemic levels [35][37] - Despite a cautious consumer environment, the Traeger brand maintained market share across outdoor grilling, particularly at price points below $1,000 [7][8] Company Strategy and Development Direction - Project Gravity aims to reshape the business by simplifying operations, optimizing channels, and improving profitability, with expected savings of approximately $64 million to $70 million across both phases [11][14] - The company plans to launch two additional products in 2026 at more accessible price points to enhance household penetration [8][9] - The focus remains on delivering great products at price points that meet consumer needs, with an emphasis on innovation and brand strength [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value of the business despite cautious consumer spending and tariff impacts [5][10] - For fiscal 2026, the company is guiding revenue of $465 million to $485 million and adjusted EBITDA of $50 million to $60 million, reflecting a year of disciplined execution [17][25] - Management noted that the expected revenue decline is driven by specific identifiable factors rather than a deterioration in underlying consumer demand [26][28] Other Important Information - The company exited fiscal 2025 with cash and cash equivalents of $20 million and total net debt of $384 million, reflecting a $10 million decline in net debt compared to the previous year [24] - Inventory at the end of the fourth quarter was $99 million, down from $107 million in the previous year, indicating effective inventory management [25] Q&A Session All Questions and Answers Question: What is the company's expectation for grill market growth in 2026? - Management indicated that the market has been modestly down in recent years but expects a recovery as consumers approach the replacement cycle for grills [35][37] Question: What is the expected revenue impact from the DTC exit? - The revenue impact from exiting DTC and other initiatives is around $70 million, with margin rate pressure due to tariffs and promotional deleverage [39][40] Question: How is the company addressing SKU rationalization? - The intent of SKU rationalization is to streamline the product portfolio for manufacturing efficiencies and enhance consumer decision-making clarity [44][46] Question: What factors are driving the expected revenue decline in 2026? - The revenue decline is attributed to ongoing MEATER pressure and marketplace health initiatives, with a divergence between sell-through and sell-in expected [56][58]

Financial Data and Key Metrics Changes - Revenues for Q4 2025 rose to $75.4 million, up from $73 million in Q4 2024, representing a growth of 5.6% on a comparable basis after excluding $1.5 million from the sold Stockman's [4] - Adjusted EBITDA for Q4 2025 increased to $10.7 million from $10.4 million in Q4 2024, marking a 23% increase when backing out one-time items from the previous year [5] Business Line Data and Key Metrics Changes - At American Place, revenues increased by 11% to $32 million in Q4 2025, with adjusted property EBITDA rising 29% to $8.7 million [5] - For the full year, American Place's revenues and adjusted property EBITDA rose to $124 million and $34.3 million, increases of 13% and 17% respectively [5] - Chamonix saw a revenue increase of $1.2 million or about 5% in the second half of 2025 compared to the same period in 2024, with adjusted property EBITDA improving significantly [8] Market Data and Key Metrics Changes - The company operates in a market with significant potential, being the closest casino to over 1 million people in a wealthy county, with competitors generating substantial gaming revenues [6][7] - The company believes its market remains under-penetrated, with expectations for continued growth at American Place [6] Company Strategy and Development Direction - The company is focused on enhancing its marketing efforts and improving operational efficiency, particularly at Chamonix, where a new management team has been established [8] - Plans for a permanent American Place Casino are underway, with foundation work expected to begin soon, aiming to accelerate the construction timeline [13][14] - The company is exploring financing options for the permanent facility without issuing equity, indicating a strategic approach to capital management [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of American Place, citing its strategic location and market dynamics [6][7] - The management team acknowledged past marketing missteps at Chamonix but is optimistic about future revenue growth due to new strategies and management [20][30] - The company is monitoring legislative developments in Indiana regarding potential relocations and remains committed to its operations in Rising Sun [35][38] Other Important Information - The company had approximately $51 million in liquidity at the end of the quarter, positioning it well for cash flow generation [12] - Management has made significant changes to the team at Silver Slipper to enhance performance, with expectations for improved EBITDA in 2026 [75][76] Q&A Session Summary Question: What is the outlook for Chamonix given recent performance? - Management acknowledged the seasonal aspects affecting Chamonix's performance and highlighted the impact of previous marketing strategies that inflated revenues without corresponding profits [19] Question: Have there been any signs of re-acceleration in Q1 2026? - Management confirmed early signs of revenue improvement despite some renovation disruptions, indicating a positive trend moving forward [22] Question: What is the status of the Indiana bill regarding Rising Sun? - Management noted the evolving nature of the legislation and expressed cautious optimism about the potential for relocation, while continuing to generate profits at Rising Sun [36][38] Question: Can you provide an update on the financing for American Place? - Management indicated that they are in discussions for financing that will not involve equity sales and will also encompass refinancing existing debt [42][46] Question: What is driving the growth at Waukegan? - Management credited a strong team and effective marketing strategies for the continued double-digit growth in Waukegan, emphasizing customer satisfaction and database expansion [121][124]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported record revenue of $106.2 million, exceeding Wall Street expectations, with a year-over-year growth of 5.9% and a sequential growth of 1.9% [4][25] - Full year 2025 revenue reached $411.8 million, representing a 17.5% year-over-year growth, with non-GAAP EBITDA of $53.8 million [4][25] - Non-GAAP EBITDA for Q4 was $13.7 million, or 12.9% of revenue, which was at the higher end of the guidance range [25][31] Business Line Data and Key Metrics Changes - AI revenue grew by 9% over Q3 and accounted for 25% of overall revenue in Q4, with full year AI revenue exceeding $90 million, marking a 30% year-over-year growth [5][25] - The retail vertical contributed 28.7% of total revenues in Q4, with a sequential increase of 5.3% but a year-over-year decline of 6.9% [26] - The technology, media, and telecommunications (TMT) vertical accounted for 28.3% of total revenues, showing a strong year-over-year growth of 27.5% [27] - The finance vertical represented 22.9% of total revenues, growing 5% year-over-year, driven by demand from fintech and large banks [27] Market Data and Key Metrics Changes - The company noted a significant increase in partner influence revenue, which exceeded 19% of total revenue in 2025, highlighting the importance of partnerships in driving growth [9] - The company is focusing on technology, financial services, and manufacturing sectors for future investments, where customized AI solutions are in high demand [7][8] Company Strategy and Development Direction - The company is transitioning from traditional time and material offerings to outcome-based engagements, which is expected to enhance margins and client satisfaction [41][70] - The introduction of platforms like the Merchandising Experience Platform (MXP) and the bitemporal database (XDB) is aimed at generating software revenue and improving operational efficiency [24][19] - The company is committed to M&A as a priority in its capital allocation strategy, focusing on acquisitions that enhance capabilities and geographic presence [33] Management's Comments on Operating Environment and Future Outlook - Management expressed a bullish outlook for 2026, anticipating continued growth in AI revenue and a strong pipeline of projects across multiple verticals [34][56] - The company acknowledged the impact of seasonality on Q1 performance but remains optimistic about the overall growth trajectory for the year [55][72] - Management emphasized the importance of AI adoption and the shift towards custom-built solutions as key drivers for future growth [50][51] Other Important Information - The company ended Q4 with a total headcount of 4,961, slightly down from the previous quarter, but with an increase in billable headcount [28] - Cash and cash equivalents totaled $341.1 million at the end of Q4, indicating a stable financial position [33] Q&A Session All Questions and Answers Question: Can you discuss the nature of AI projects moving into production and customer demand? - Management highlighted that AI-powered customer experiences and enterprise AI platforms are driving rapid adoption and measurable ROI for clients [38][40] Question: What is the outlook for growth and margin expansion in 2026? - Management indicated a conservative yet optimistic outlook, with expectations of margin expansion driven by AI-related projects and operational efficiencies [56][85] Question: Are you seeing increased urgency among clients to embrace AI? - Management confirmed that clients are increasingly adopting AI solutions, with a focus on custom-built applications due to reduced development costs [63][51]

Financial Data and Key Metrics Changes - As of December 31, 2025, the company reported cash and investments of $301.8 million, indicating a strong financial position to support ongoing clinical programs [22] - The funds expended in 2025 were primarily directed towards the advancement of the HCV Phase 3 program and discovery efforts for HEV treatment [22] - R&D expenses increased in 2025 compared to 2024, driven by external spending on HCV clinical development, while G&A expenses decreased due to lower stock-based compensation [23] Business Line Data and Key Metrics Changes - The global Phase 3 HCV program is on track, with enrollment completed for the North American trial C-BEYOND and expected completion for C-FORWARD by midyear [7][12] - The company anticipates top-line results for C-BEYOND by midyear and for C-FORWARD by year-end [7][25] - The HEV program is positioned as a strategic expansion, with AT-587 selected as the lead product candidate, aiming to address a significant unmet need in immunocompromised patients [20][26] Market Data and Key Metrics Changes - In the U.S., approximately 160,000 new chronic HCV infections are reported annually, with only 85,000 patients treated, highlighting a significant treatment gap [8][15] - The incidence of liver cancer, primarily caused by Hepatitis C, is projected to increase by over 50% within the next five years [9] - The unmet need for chronic HEV treatment represents a market opportunity estimated between $750 million and $1 billion per year [20] Company Strategy and Development Direction - The company is focused on delivering a differentiated and optimized therapy for HCV, with a regimen designed to fit the test and treat model of care [5][25] - The commercial strategy includes a user-friendly blister card for adherence and a projected profitability shortly after launch [16] - The HEV program represents a strategic expansion of the antiviral pipeline, addressing a major unmet need for patients with no approved treatment available [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving enrollment targets for both C-BEYOND and C-FORWARD, indicating a robust clinical program [28] - The company anticipates a pivotal year in 2026, with key milestones expected from both HCV and HEV programs [25][26] - The management highlighted the importance of treatment duration and low risk of drug-drug interactions as key factors influencing prescriber preferences [40] Other Important Information - The company returned $25 million to stockholders through a share repurchase program in 2025, reflecting a commitment to drive shareholder value [22] - The company is preparing for a commercial launch while maintaining financial discipline and focusing on value-creating advancements [24] Q&A Session Summary Question: Does achieving enrollment targets for the cirrhotic population for C-BEYOND increase confidence in C-FORWARD? - Management confirmed that cirrhotic enrollment has not been an issue and they are confident in achieving overall targets for both trials [28] Question: Can you discuss the commercial landscape and pricing evolution for HCV? - Management explained that the specialty market for DAAs is well understood, and preliminary research indicates payers are interested in including the new regimen in formularies, with stable pricing trends observed [31][32][33] Question: How does the primary endpoint analysis for C-BEYOND affect the regimen's effect size? - Management indicated that the modified intent-to-treat analysis allows for flexibility in dosing, and they are optimistic about the regimen's potential based on phase 2 data [36][37] Question: Can you elaborate on the Merck license agreement? - Management confirmed the in-licensing of ruprezvir, with milestone payments and royalties due upon successful commercialization, expected in 2027 [44]

Financial Data and Key Metrics Changes - For the full year 2025, net sales increased by 4.4% to $600 million, marking consecutive growth [5][31] - Gross margin expanded by 30 basis points to 57.3%, despite facing tariff headwinds that negatively impacted margins by approximately 100 basis points [9][32] - Adjusted EBITDA for the year was $19.7 million, or 3.3% of net sales, down from $23.3 million or 4.1% the previous year [32] Business Line Data and Key Metrics Changes - The U.S. region, the largest market, saw net sales growth of 7% to $394 million, accounting for 66% of total business [5][10] - Princess Polly, the largest brand, delivered double-digit net sales growth and expanded its omni-channel strategy, opening seven new stores in the U.S. and one in Australia [6][14] - Petal and Pup performed well, particularly in dresses and event wear, and expanded its wholesale presence, especially at Nordstrom [19][22] Market Data and Key Metrics Changes - Net sales in Australia increased by 1.6% to $58.1 million, indicating a stable market performance [28] - Total orders rose by 6.4% year-over-year to 2.2 million, with active customers increasing to 4.18 million [29] Company Strategy and Development Direction - The company’s strategy for 2026 focuses on three core priorities: attracting customers through direct channels, expanding brand awareness via retail and wholesale, and streamlining operations [11][12] - The company is embedding AI across its operations to enhance customer experience and operational efficiency, expecting it to drive margin expansion in the coming years [12][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s momentum entering 2026, with expectations for net sales growth between $625 million and $635 million [34][35] - The company anticipates adjusted EBITDA of between $27 million and $29 million for fiscal 2026, with a focus on improving gross margins and operational discipline [35][36] Other Important Information - The company completed a structural transformation of its supply chain, with approximately 50% of U.S. sourcing now from outside China [8] - Inventory levels decreased by 10% year-over-year, reflecting improved inventory management practices [8][34] Q&A Session Summary Question: Can you walk us through the key drivers of the EBITDA guide for 2026? - Management indicated that the bulk of the EBITDA improvement will come from gross margin expansion, moving past the headwinds faced in 2025 [41][42] Question: What percentage of the revenue mix now comes from retail? - Management confirmed strong store performance and productivity, with plans to continue expanding the store footprint [45][46] Question: How do you envision the business retail versus wholesale? - Management highlighted the opportunity for growth in both retail and wholesale, with a focus on opening more stores while also expanding wholesale partnerships [50][52] Question: How are you thinking of the cadence with top line and adjusted EBITDA? - Management noted that growth is expected to be mid-single digits for the full year, with a more challenging comparison in Q1 due to prior year disruptions [55][56] Question: Can you provide more detail on the key assumptions driving deceleration in growth? - Management explained that the deceleration is largely due to tougher comparisons from prior year performance, particularly in the wholesale channel [68]