Financial Data and Key Metrics Changes - Fourth quarter 2025 revenue totaled $14.3 million, a decrease of $11.9 million or 46% compared to the fourth quarter of 2024 [22] - Full year 2025 revenue increased to $86.2 million compared to $83.8 million in 2024, driven by strong performance in the first half of the year [24] - Gross profit for the fourth quarter was $9.5 million, a decrease of $12.3 million or 56% from the fourth quarter of 2024 [23] - Full year 2025 gross margin was 74.5% compared to 85.6% in 2024 [25] - Net loss for the quarter was $594,000 or $0.04 per share, while the full year net loss was $5.1 million, an improvement of $667,000 compared to the net loss of $5.8 million in 2024 [24][27] Business Line Data and Key Metrics Changes - Operating expenses for the fourth quarter were $10.7 million, down more than 50% compared to the fourth quarter of 2024, primarily due to a 60% year-over-year decrease in marketing expenses [23] - Full year 2025 operating expenses were $70.9 million, down $6.4 million or 8% from 2024 [26] - The company acquired 83 new clients in 2025, reflecting improved retention quality and higher average budget commitments [16] Market Data and Key Metrics Changes - The company is beginning to see recovery in revenue after a low point in mid-January, with expectations for gradual recovery throughout 2026 [28] - Strong double-digit growth is forecasted for each quarter of 2026, driven by a healthy sales pipeline [28] Company Strategy and Development Direction - The company aims to leverage its IntentKey technology to pursue high-margin growth and establish a more resilient business model [10] - Four strategic pillars include refined go-to-market focus, raising IntentKey's industry profile, continuous product innovation, and high-margin growth [10][12][15] - The company is focusing on high-potential verticals such as life sciences, pharmaceuticals, healthcare, automotive, and government [36] Management's Comments on Operating Environment and Future Outlook - The industry is experiencing a shift due to emerging technologies and increased regulation, creating a ripe environment for disruption [7] - Management believes that IntentKey provides a significant competitive advantage in the evolving programmatic landscape [12] - The company is optimistic about its growth potential and is taking steps to enhance brand awareness and market presence [31] Other Important Information - The company is migrating its data centers to AWS cloud for cost savings and scalability [19] - A new product-specific website for IntentKey will be launched to support sales teams and encourage self-service trials [16] Q&A Session Summary Question: Capital deployment strategy between existing businesses and new data offering - Management indicated that marketing expenses are variable and tied to sales velocity, with a focus on demand creation for IntentKey [34] Question: Plans to improve awareness of IntentKey - Management plans to raise IntentKey's profile through thought leadership, industry presence, and targeted marketing in high-potential verticals [35] Question: Revenue expectations and expense management - Management expects revenue to increase gradually, with careful management of expenses, particularly in marketing [39][41] Question: IntentKey self-serve product's role in growth roadmap - Management views the self-serve product as a longer-term ambition that will contribute to revenue growth over time [45] Question: Relationship with Google and contract extensions - Management emphasized the importance of maintaining quality and compliance to uphold relationships with key partners like Google [52] Question: Status of a potential government contract - Management confirmed that a multi-year, multi-million dollar government contract is in the final stages and expected to be executed soon [58]

Financial Data and Key Metrics Changes - In Q4 2025, revenue totaled $14.3 million, a decrease of $11.9 million or 46% compared to Q4 2024 [21] - Full year 2025 revenue increased to $86.2 million compared to $83.8 million in 2024, driven by strong performance in the first half of the year [23] - Gross profit for Q4 2025 was $9.5 million, a decrease of $12.3 million or 56% from Q4 2024 [22] - Full year 2025 net loss was $5.1 million, an improvement of $667,000 compared to the net loss of $5.8 million in 2024 [26] - Adjusted EBITDA for Q4 2025 was $360,000, while full year 2025 adjusted EBITDA was a negative $1.3 million [23][26] Business Line Data and Key Metrics Changes - The cost of revenue increased to $22 million in 2025, an 83% increase compared to 2024, primarily due to changes in the platform sales mix [24] - Operating expenses for Q4 2025 were $10.7 million, down more than 50% compared to Q4 2024, driven by a 60% year-over-year decrease in marketing expenses [22] - Full year 2025 operating loss was $6.7 million compared to $5.5 million in 2024 [25] Market Data and Key Metrics Changes - The company reported improved retention quality and higher average budget commitments in early 2026 compared to the prior year [15] - The first and second quarters of 2025 were record revenue quarters, making year-over-year comparisons challenging [27] Company Strategy and Development Direction - The company plans to focus on four strategic pillars: refined go-to-market focus, raising IntentKey's industry profile, continuous product innovation, and high-margin growth [10][12][14] - The strategy includes pursuing large, high-value deals with brand organizations and integrating IntentKey as a service and data provider [11] - The company aims to leverage its proprietary technology to drive higher-margin growth and improve financial resilience [18] Management's Comments on Operating Environment and Future Outlook - The management highlighted a challenging operating environment due to increased regulation and consumer privacy concerns, which necessitate quality controls [6] - The company is optimistic about the growth trajectory of IntentKey and expects to see recovery in revenue after a low point in January 2026 [27][28] - Management emphasized the importance of building brand awareness and engaging with high-potential verticals to drive growth [34] Other Important Information - The company is migrating its data centers to AWS cloud for cost savings and scalability [17] - A new product-specific website for IntentKey will be launched to support sales teams and encourage self-service trials [15] Q&A Session Summary Question: Can you speak to the capital deployment strategy between your two existing businesses plus the new data offering? - Management indicated that capital deployment on the Platforms business is variable and tied to sales velocity, while IntentKey will focus on demand creation and trial incentives [31][32] Question: What are the plans to improve awareness of IntentKey? - Management plans to raise IntentKey's profile through thought leadership, industry conferences, and targeted marketing in high-potential verticals [33][34] Question: How should we think about the expenses given an increased focus on marketing? - Management confirmed that while revenue is expected to increase, they are being careful with expenses and have already started paring back some costs [35][36] Question: Where does the IntentKey self-serve product fit in your growth roadmap? - Management views the self-serve product as a longer-term ambition that will contribute to revenue growth over time [41][42] Question: How do you view the relationships with key platform partners like Google? - Management emphasized the importance of maintaining quality and compliance to uphold these critical relationships [47][48] Question: Is the government contract still in the works? - Management confirmed that the government contract is alive and expected to be executed soon, indicating a multi-million dollar engagement [52][54]

Financial Data and Key Metrics Changes - The company reported revenues of approximately $156 million for the year, representing a 25% increase compared to 2024 [5] - Adjusted EBITDA was roughly $25 million in Q4 and $101 million for the year, compared to $24 million and $69 million in the prior year periods [5] - Net income for Q4 was $21.6 million or $0.59 per diluted share, and adjusted net income was $12.5 million or $0.34 per diluted share [8] - Net income for the full year was $70.2 million or $1.90 per diluted share, and adjusted net income was $54.7 million or $1.48 per share [9] - Cash, including restricted cash, was approximately $112 million at the end of the quarter, representing over $3 per common share outstanding [5][26] Business Line Data and Key Metrics Changes - Production averaged 18.5 MBOE per day for the full year, an increase of 12% on a BOE basis and 32% on oil compared to 2024 [4] - Q4 production averaged 19.5 MBOE per day [4] - The company successfully completed and brought 6 wells online from its operated 1-rig Cherokee drilling program, with a per well average peak 30-day production rate of approximately 2,000 BOE per day, made up of 44% oil [12] Market Data and Key Metrics Changes - Commodity price realization for the quarter was $57.56 per barrel of oil, $2.20 per MCF of gas, and $14.92 per barrel of NGLs, compared to Q3 realizations of $65.23 per barrel of oil, $1.71 per MCF of gas, and $15.61 per barrel of NGLs [7] - The company plans to drill 10 operated Cherokee wells with 1 rig in 2026, with gross well costs estimated between $9 million and $11 million [13] Company Strategy and Development Direction - The company aims to continue its Cherokee development with one rig throughout 2026, anticipating a 20% growth in oil production volumes [17] - The strategy includes maximizing the value of incumbent MidCon PDP assets, exercising capital stewardship, and maintaining optionality for value-accretive M&A opportunities [21][23] - The company emphasizes a commitment to ESG responsibilities and efficient operations while pursuing high-return growth projects [20][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate commodity price cycles due to a strong balance sheet and a versatile asset base [19] - The company is monitoring market conditions closely and is prepared to adjust its development plans based on economic environments [18] - Management highlighted the importance of maintaining flexibility in capital allocation and prioritizing shareholder value through dividends and share repurchases [24] Other Important Information - The company paid $4.4 million in dividends during the quarter, including $0.6 million in shares under the dividend reinvestment plan [6] - Capital expenditures during the quarter were approximately $18 million, with no debt outstanding [7] Q&A Session Summary Question: Context on 2026 production guidance and CapEx range - Management indicated that timing and working interest could affect the production guidance range, with potential shifts due to crew availability or weather [30][31] Question: View on supportive spot market and hedging positions - Management noted that they are opportunistic with hedging, having no debt and thus no mandatory hedging requirements, allowing for flexibility in locking in cash flows [33][34] Question: Guidance on higher price differentials for NGLs - Management explained that differentials vary by commodity and that higher gas prices could lead to better realizations, while regional basis widening in Q4 was seen as localized and temporal [39][40]

Financial Data and Key Metrics Changes - Production averaged 18.5 MBOE per day for the full year, a 12% increase on a BOE basis and 32% on oil compared to 2024, with Q4 production averaging 19.5 MBOE per day [3][4] - Revenues for the year were approximately $156 million, representing a 25% increase compared to 2024 [4] - Adjusted EBITDA was roughly $25 million in Q4 and $101 million for the year, compared to $24 million and $69 million in the prior year periods [4][8] - Net income for Q4 was $21.6 million or $0.59 per diluted share, and for the full year, it was $70.2 million or $1.90 per diluted share [7][8] Business Line Data and Key Metrics Changes - The company successfully completed and brought 6 wells online from the operated 1-rig Cherokee drilling program, with an average peak 30-day production rate of approximately 2,000 BOE per day for these wells [11] - Capital expenditures for the quarter were approximately $18 million, with total capital spend for the year at $76.2 million [6][10] Market Data and Key Metrics Changes - Commodity price realizations for the quarter were $57.56 per barrel of oil, $2.20 per MCF of gas, and $14.92 per barrel of NGLs, compared to third quarter realizations of $65.23, $1.71, and $15.61 respectively [6] Company Strategy and Development Direction - The company plans to continue its Cherokee development with one rig throughout 2026, anticipating a 20% growth in oil production volumes [15] - The strategy includes maximizing the value of incumbent MidCon PDP assets, exercising capital stewardship, and maintaining optionality for potential M&A opportunities [19][20] - The company aims to uphold its ESG responsibilities while growing the business in a safe and efficient manner [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the production growth and the potential for attractive returns from Cherokee wells, with break-evens down to $35 WTI [16] - The company has a strong balance sheet with no debt, allowing for flexibility in capital allocation and the ability to respond to commodity price cycles [17][24] Other Important Information - The company paid $4.4 million in dividends during the quarter, with a total of $4.60 per share in dividends paid since the beginning of 2023 [5] - The company has approximately $112 million in cash and cash equivalents, representing over $3 per share of common stock outstanding [24] Q&A Session Summary Question: Can you provide context on the production guidance range for 2026? - Management indicated that timing and working interest could affect the production guidance range, with potential shifts due to crew availability or weather [27][28] Question: How does the current spot market influence hedging positions? - Management noted that they are opportunistic with hedging, having no debt and thus no mandatory hedging requirements, allowing them to layer in additional contracts as prices rise [30][31] Question: Can you comment on the higher price differentials guidance for NGLs? - Management explained that differentials vary by commodity and that higher gas prices could lead to better realizations, while regional basis widening in Q4 was seen as localized and temporal [36][38]

Financial Data and Key Metrics Changes - Total investment income for Q4 2025 was $1.3 million, a decrease of 40% compared to the prior year, primarily due to a 46% reduction in interest income from the repayment of five debt instruments [31] - For the full year 2025, total investment income was $6.5 million, down from $8.6 million in 2024, reflecting similar dynamics as the fourth quarter [34] - Net investment income for Q4 was $600,000 or $0.20 per share, while for the full year it was $5.3 million or $1.80 per share, a 35% increase over the prior year [33][35] - Net asset value per share at year-end was $17.57, with total net assets of $52.2 million [36][39] Business Line Data and Key Metrics Changes - The portfolio had a fair value of $48.5 million across 20 companies at year-end, a decline from prior year levels due to loan repayments and valuation adjustments [15] - Debt investments represented 79% of the portfolio, up from 75% at year-end 2024, indicating a shift towards more income generation [20] - The annualized weighted average yield on debt investments was 11.3% at year-end, reflecting changes in portfolio mix and increased non-accrual activity [20][21] Market Data and Key Metrics Changes - The company experienced a challenging market environment with uneven M&A activity and selective senior lenders, impacting new deal origination [6] - The industry mix included professional and business services as the largest allocation, followed by manufacturing, distribution, and consumer products, which helps mitigate exposure to any single sector [26] Company Strategy and Development Direction - The company emphasized disciplined execution and capital allocation, prioritizing balance sheet strength and liquidity over growth for growth's sake [6] - The strategy includes maintaining a resilient, income-oriented portfolio to support sustainable dividends while pursuing long-term capital appreciation [23][42] - The focus for 2026 is on prudent capital deployment, active portfolio oversight, disciplined underwriting, and long-term shareholder value creation [43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving market conditions and potential deployment opportunities in 2026, highlighting the company's flexibility due to the absence of leverage [40][41] - The company aims to be selective and patient in its investment approach, focusing on risk-adjusted return objectives rather than volume [41][42] Other Important Information - The company paid out total cash dividends of $1.72 per share in 2025, including a special dividend of $0.56 per share in Q4 [11] - The company ended the year with over $23 million in total liquidity and no debt outstanding, providing significant flexibility for future opportunities [7] Q&A Session Summary - No specific questions or answers were provided in the content, thus this section is not applicable.

Financial Data and Key Metrics Changes - Total investment income for Q4 2025 was $1.3 million, a decrease of 40% compared to the prior year, primarily due to a 46% reduction in interest income from the repayment of five debt instruments [28] - For the full year 2025, total investment income was $6.5 million, down from $8.6 million in 2024, reflecting similar dynamics as the fourth quarter [31] - Net investment income for Q4 was $600,000 or $0.20 per share, while for the full year it was $5.3 million or $1.80 per share, a 35% increase over the prior year [32] Business Line Data and Key Metrics Changes - The portfolio had a fair value of $48.5 million across 20 companies at year-end, with a shift towards more income generation as debt investments represented 79% of the portfolio, up from 75% at year-end 2024 [14][18] - The annualized weighted average yield on debt investments was 11.3% at year-end, reflecting changes in portfolio mix and increased non-accrual activity [18] Market Data and Key Metrics Changes - The company experienced a challenging M&A environment with uneven activity and selective senior lenders, impacting new deal origination across the BDC sector [6] - The industry mix included professional and business services as the largest allocation, followed by manufacturing, distribution, and consumer products, which helps mitigate exposure to any single sector [23] Company Strategy and Development Direction - The company emphasized disciplined execution and capital allocation, prioritizing balance sheet strength and liquidity over growth for growth's sake [6] - The strategy focuses on building a resilient, income-oriented portfolio to support sustainable dividends while maintaining long-term capital appreciation potential [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving market conditions and potential deployment opportunities in 2026, highlighting the company's flexibility due to no leverage [37] - The focus for 2026 includes prudent capital deployment, active portfolio oversight, and disciplined underwriting to enhance shareholder returns [40] Other Important Information - The company ended the year with over $23 million in total liquidity and no debt outstanding, providing significant flexibility for future opportunities [7] - A special dividend of $0.56 per share was declared in Q4 2025, reflecting the success of capital recycling efforts [10] Q&A Session Summary - No specific questions or answers were provided in the content, thus this section is not applicable.

Financial Data and Key Metrics Changes - Total investment income for Q4 2025 was $1.3 million, a decrease of 40% compared to the prior year period, primarily due to a 46% reduction in interest income from the repayment of five debt instruments [16] - For the full year 2025, total investment income was $6.5 million, down from $8.6 million in 2024, reflecting similar dynamics as the fourth quarter [17] - Net investment income for Q4 2025 was $600,000 or $0.20 per share, while for the full year it was $5.3 million or $1.80 per share, a 35% increase over the prior year [17][18] - Net asset value per share at year-end was $17.57, with total net assets of $52.2 million [19] Business Line Data and Key Metrics Changes - The portfolio had a fair value of $48.5 million across 20 companies at year-end, with a shift towards more income generation as debt investments represented 79% of the portfolio, up from 75% at year-end 2024 [8][10] - The annualized weighted average yield on debt investments was 11.3% at year-end, reflecting a change due to portfolio mix shifts and increased non-accrual activity [10][11] Market Data and Key Metrics Changes - The professional and business services sector represented the largest allocation in the portfolio, followed by manufacturing, distribution, and consumer products, which helps mitigate exposure to any single sector [13] - The broader lower middle market environment and tighter credit conditions influenced the valuation changes across the portfolio [9] Company Strategy and Development Direction - The company emphasized disciplined execution and capital allocation in 2025, prioritizing balance sheet strength and liquidity over growth [4] - The strategy includes delivering meaningful cash returns to shareholders, with total cash dividends of $1.72 per share in 2025, including a special dividend in Q4 [6] - The focus for 2026 is on prudent capital deployment, active portfolio oversight, and long-term shareholder value creation [22] Management's Comments on Operating Environment and Future Outlook - Management noted that 2025 was a transition year that strengthened the company's foundation, navigating a challenging environment and addressing significant portfolio events [21] - There is optimism regarding improving sponsor activity and a gradual reopening of M&A markets, which could present attractive deployment opportunities in 2026 [21] Other Important Information - The company ended the year with over $23 million in total liquidity and no debt outstanding, providing significant flexibility for future opportunities [4] - The investment in Tilson Technology significantly impacted the portfolio's valuation, but management remains optimistic about its former spinoff, Virta [9] Q&A Session Summary Question: What is the outlook for the M&A market? - Management expressed hope for improving sponsor activity and a gradual reopening of M&A markets, which could lead to more attractive deployment opportunities in 2026 [21] Question: How does the company plan to manage its portfolio moving forward? - The company plans to focus on prudent capital deployment, active portfolio oversight, and maintaining a disciplined approach to underwriting [22]

Financial Data and Key Metrics Changes - Total revenue for 2025 was $55.8 million, an increase of $3.1 million or 5.8% compared to 2024 [12] - Operating expenses increased approximately $5.3 million or 12.2% to $48.6 million compared to $43.3 million in 2024 [12] - Net income for 2025 was $3 million or $0.11 per diluted share, down from $5.8 million or $0.24 per diluted share in 2024 [14] - Adjusted EBITDA decreased 0.7% to $26.5 million from $26.7 million in the prior year [15] Business Line Data and Key Metrics Changes - The company increased its collective rate base by $70 million or 59% over 2024 and 2025 [4] - Total active service connections increased 6.3% to 68,577 at December 31, 2025 [9] - The company invested $67.3 million into infrastructure improvements in existing utilities [10] Market Data and Key Metrics Changes - The single-family dwelling unit market in the Phoenix Greater Metro Area saw a decrease of nearly 20% in building permits from 2024 to 2025 [10] - The Maricopa market realized 600 building permits in 2025, representing a 39% decrease from the same period in 2024 [11] - Despite the decline in permits, the company achieved a 3.2% year-over-year organic increase in active connections [11] Company Strategy and Development Direction - The company aims to control expenses in 2026 and has reduced the pace of capital investments [6] - The Arizona Governor signed water legislation known as Ag-to-Urban, expected to improve aquifer sustainability and support growth [7] - The company is focused on expanding its Total Water Management platform and applying expertise to new utilities [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the need for new rates to keep up with investments and inflation [6] - The company believes the decline in permits is temporary and remains well-positioned for long-term growth in the Phoenix MSA [11] - Management expressed pride in the team's execution in 2025 and commitment to growth despite challenges [18] Other Important Information - The company faced increased operating expenses due to higher medical costs, legal expenses, and elevated municipal licensing fees [13] - Other expenses for 2025 were $3.2 million, up from $1.5 million in 2024, primarily due to a loss on asset disposals [14] - The company is actively engaging with regulatory stakeholders regarding rate relief for capital investments [16] Q&A Session Summary Question: Inquiry about future rate cases and potential changes - Management acknowledged the frustration with the current rate case process and noted the unique circumstances surrounding the recommissioning of the Southwest Plant [23][24] - They emphasized the importance of learning from each rate case and maintaining communication with regulatory stakeholders [26] Question: Use of AI in operations - Management discussed potential AI applications, particularly in call centers to improve customer service and operational efficiency [27][28] Question: Options for re-filing if the current rate case does not go as hoped - Management is evaluating options for re-filing and considering the best course of action if necessary [30] Question: Clarification on the rate base-able assets - Management reiterated that the $70 million of rate base-able assets are now in service, indicating a matter of timing for rate case outcomes [32]

Financial Data and Key Metrics Changes - Total revenue for 2025 was $55.8 million, an increase of $3.1 million or 5.8% compared to 2024 [12] - Operating expenses increased approximately $5.3 million or 12.2% to $48.6 million compared to $43.3 million in 2024 [12] - Net income for 2025 was $3 million or $0.11 per diluted share, down from $5.8 million or $0.24 per diluted share in 2024 [14] - Adjusted EBITDA decreased 0.7% to $26.5 million from $26.7 million in the prior year [15] Business Line Data and Key Metrics Changes - The company increased its collective rate base by $70 million or 59% over 2024 and 2025 [4] - Total active service connections increased 6.3% to 68,577 at December 31, 2025 [9] - The company invested $67.3 million into infrastructure improvements in existing utilities [10] Market Data and Key Metrics Changes - The single-family dwelling unit market in the Phoenix Greater Metro Area saw a decrease of nearly 20% in building permits from 2024 [10] - The Maricopa market experienced a 39% decrease in building permits from the previous year [11] - Despite the decline in permits, the company achieved a 3.2% year-over-year organic increase in active connections [11] Company Strategy and Development Direction - The company aims to control expenses in 2026 and has reduced the pace of capital investments [6] - The Arizona Governor signed significant water legislation known as Ag-to-Urban, expected to improve aquifer sustainability and support growth [7] - The company is focused on expanding its Total Water Management platform and applying expertise to new utilities [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges of regulatory lag and the need for new rates to keep up with investments and inflation [5] - The company believes the decline in permits is temporary and remains well-positioned for long-term growth in the Phoenix MSA [11] - Management expressed confidence in the future, stating it is a matter of when, not if, the rate case will be resolved favorably [32] Other Important Information - The company faced increased operating expenses due to higher medical costs, professional fees, and utility costs [13] - Other expenses for 2025 were $3.2 million, up from $1.5 million in 2024, primarily due to asset disposals [14] - The company is actively engaging with regulatory stakeholders regarding rate relief for significant capital investments [16] Q&A Session Questions and Answers Question: Analysis on future rate cases - Management acknowledged the frustration with the current rate case and noted the unique circumstances surrounding the recommissioning of the Southwest Plant [23][24] Question: Use cases for AI in operations - Management discussed potential AI applications in call centers and operational efficiencies, emphasizing security considerations before broader implementation [27][28] Question: Options if the rate case does not go as hoped - Management is evaluating options for potential re-filing if necessary, but no specific plans were announced [30]

Financial Data and Key Metrics Changes - Total revenue for 2025 was $55.8 million, an increase of $3.1 million or 5.8% compared to 2024, driven by the City of Tucson acquisition, organic growth in connections, and higher rates [12] - Operating expenses rose by approximately $5.3 million or 12.2% to $48.6 million, with notable increases in depreciation and amortization expenses [12][13] - Net income for 2025 was $3 million or $0.11 per diluted share, down from $5.8 million or $0.24 per diluted share in 2024 [15] Business Line Data and Key Metrics Changes - The company increased its collective rate base by $70 million or 59% over 2024 and 2025, reflecting significant capital investments [4] - Total active service connections grew by 6.3% to 68,577 as of December 31, 2025, with a 3.2% growth rate excluding the Tucson acquisition [9][10] Market Data and Key Metrics Changes - The single-family dwelling unit market in the Phoenix Greater Metro Area saw a decrease of nearly 20% in building permits from 2024 to 2025, with Maricopa experiencing a 39% decrease [10][11] - Despite the decline in permits, the company reported a 3.2% year-over-year organic increase in active connections, indicating resilience in the market [11] Company Strategy and Development Direction - The company aims to control expenses in 2026 while reducing the pace of capital investments, focusing on long-term value creation [6] - The Arizona Governor signed the Ag-to-Urban water legislation in 2025, which is expected to enhance aquifer sustainability and support growth in service areas [7] - The company is committed to expanding its Total Water Management platform and applying expertise to new utilities, which is seen as beneficial for stakeholders [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by rising expenses and the need for new rates to keep pace with investments and inflation [5][6] - The company remains optimistic about long-term growth in the Phoenix MSA, despite temporary declines in permit activity [11] Other Important Information - Adjusted net income for 2025 was $3.9 million or $0.14 per diluted share, down from $6.3 million or $0.26 per diluted share in 2024 [15] - Adjusted EBITDA decreased by 0.7% to $26.5 million from $26.7 million in the prior year [16] Q&A Session Summary Question: Inquiry about future rate cases and potential changes - Management acknowledged the frustration with the current rate case process and emphasized the uniqueness of the situation regarding the recommissioning of the Southwest Plant [24][26] Question: Use of AI in operations - Management discussed potential AI applications, particularly in call centers, to improve customer service and operational efficiency, while noting security considerations [28][29] Question: Options if the rate case does not proceed as hoped - Management is evaluating options for a potential refiling if necessary, but no specific announcements were made [30]