Financial Data and Key Metrics Changes - InvenTrust reported Same Property NOI growth of 5.3% for 2025, marking the second consecutive year above 5% and the fifth consecutive year of growth exceeding 4% [4] - Core FFO finished at $1.89 per share, representing a 6.2% year-over-year growth [4][10] - Nareit FFO totaled $147.8 million or $1.89 per diluted share, reflecting a 6.2% increase over 2024 [10] - Total liquidity at year-end stood at $480 million, including $35 million in cash and $445 million available under the revolving credit facility [11] Business Line Data and Key Metrics Changes - Same Property NOI for the fourth quarter was $44.3 million, up 3% year-over-year [10] - Occupancy gains contributed approximately 80 basis points to Same Property NOI growth, while positive leasing spreads added roughly 90 basis points [10] - Redevelopment activity provided an additional 70 basis points of growth, with percentage and ancillary rents contributing around 20 basis points [10] Market Data and Key Metrics Changes - Top-performing retail markets in 2025 included Charlotte, Tampa, Orlando, and Dallas, with Charlotte ranking first for retail rent increases [8] - Retail sales are up, and announced store openings continue to exceed closures, indicating sustained confidence in physical retail [15] Company Strategy and Development Direction - The company aims to expand its portfolio in Sun Belt markets, focusing on grocery-anchored assets and areas with long-term population growth [6][8] - InvenTrust completed the sale of five California assets and redeployed that capital into higher growth markets [4] - The company plans to invest approximately $300 million in net investment activity for 2026, with a focus on maintaining a disciplined acquisition approach [12][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the retail landscape's resilience, despite increased store closures and low new retail construction [7] - The outlook for 2026 includes core FFO per share growth expected in the mid-single-digit range and Same Property NOI growth projected between 3.25% and 4.25% [12][8] - Management noted that the quality of the merchandise mix and improved credit quality have contributed to reduced credit loss expectations [56] Other Important Information - The board approved a 5% increase in the annual cash dividend for 2026, raising the annualized rate to $1 per share [12] - The company expects redevelopment initiatives to contribute approximately 50-100 basis points of incremental NOI growth annually over the next couple of years [7] Q&A Session Summary Question: Funding sources for $300 million net acquisition activity - Management confirmed ample balance sheet capacity to fund acquisitions, with plans to use the line of credit and potentially issue private placement debt [21][25] Question: Impact of Amazon Go and Fresh store closures - Management indicated that Whole Foods locations in their portfolio are performing well and are not at risk from Amazon's store closures [28] Question: Acquisition pipeline and pricing - Nearly half of the $300 million acquisition guidance is either under contract or awarded, with a competitive market for assets [35][36] Question: Same-store revenue impact from signed-not-open pipeline - Approximately 2% of ABR is from signed-not-open leases, with expectations for most to come online this year [41] Question: Competitive market pricing - Management noted that pricing remains consistent, with strong competition across various asset types [53]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported distributable earnings of $37 million, or $0.26 per diluted share, while for the full year, distributable earnings totaled $139 million, or $0.98 per diluted share [4] - GAAP net income available to common stockholders was $26 million, or $0.18 per diluted share for Q4, and $114 million, or $0.81 per diluted share for the full year [4] - The total CECL allowance stood at $383 million at year-end, equating to 418 basis points of the loan portfolio's total amortized cost, down from 457 basis points a year ago [6] Business Line Data and Key Metrics Changes - The company committed $1.3 billion to new loans in Q4, with $1.1 billion funded at close, and completed approximately $200 million of gross add-on fundings for previously closed loans [7] - For the full year, ARI committed $4.4 billion to new loans, with $3.3 billion funded at close and completed about $900 million of gross add-on fundings [7] - Loan repayments and sales totaled $852 million in Q4 and $2.9 billion for the full year, reflecting continued borrower execution and portfolio rotation [8] Market Data and Key Metrics Changes - Over 60% of the loan portfolio is now represented with post-2022 origination, resulting in an overall growth of the loan portfolio, which increased by approximately $1.6 billion year-over-year on an amortized cost basis [8] - The total loan portfolio at year-end was approximately $8.8 billion by amortized cost, with a weighted average unlevered all-in yield of 7.3% [8] - The weighted average loan-to-value ratio is approximately 59% [8] Company Strategy and Development Direction - The company is focused on improving run rate, cash flow, and maximizing value at exit, particularly with its real estate owned (REO) portfolio [1] - Management is evaluating options to unlock additional value from an adjacent owned land parcel related to The Brook [2] - The company is exploring strategies to create more value on vacant sites and is implementing cost savings initiatives at its hotel properties to enhance net cash flow [2][20] Management's Comments on Operating Environment and Future Outlook - Management received overwhelmingly positive feedback from investors regarding efforts to unlock value, but there are questions about future capital strategies [11] - The management is currently evaluating specific ideas for future strategies but has not concluded on any particular path yet [13] - The company is considering the timing of monetizing its REO assets based on market conditions and the stabilization of properties [18] Other Important Information - The company ended the year with $151 million of total liquidity and held over $430 million of unencumbered assets [8][9] - Book value per share was $12.14 at year-end, relatively flat compared to the prior quarter [9] Q&A Session Summary Question: Feedback from investors regarding the transaction value and stock trading - Management noted positive feedback from investors but acknowledged questions about future capital strategies and the disconnect between announced book value and stock price [11][12] Question: Options for future strategies and potential plans - Management indicated that there are specific ideas being evaluated but it is too early to conclude on any particular strategy [13][14] Question: Marketing and monetization of REO assets - Management discussed the lease-up progress of The Brook and the assessment of market conditions for potential monetization [18][19] Question: Dividend plans post-portfolio sale - Management envisions paying a Q1 dividend consistent with previous quarters, subject to board approval, and will discuss future dividends as they approach Q2 [26][27]

Financial Data and Key Metrics Changes - Underwriting profit increased from $9 million in 2024 to $67 million in 2025, marking a significant improvement [6] - Net investment income grew by nearly 20%, contributing to the overall financial performance [6] - Full-year operating earnings per share improved by 80%, reaching $4.60, while book value per share increased by more than $6 [6][10] - Full-year net written premium rose by 9% to over $1.3 billion, driven by record new business production and strong retention [7] - The annual combined ratio improved to 94.8%, reflecting ongoing enhancements in the underlying loss ratio and expense ratio [7] Business Line Data and Key Metrics Changes - Growth in net written premium was strongest in the core commercial business, which includes small business, middle market, and construction [12] - Specialty E&S net written premium experienced double-digit growth in both the fourth quarter and full year [15] - The surety business also delivered double-digit net written premium growth for the quarter and full year [15] Market Data and Key Metrics Changes - Rate increases moderated to 4.8% for the quarter, indicating a more competitive environment, particularly in property lines [13] - Casualty lines experienced modest impacts, with umbrella lines returning to double-digit increases [13] Company Strategy and Development Direction - The company has focused on deepening underwriting expertise and enhancing actuarial insights to attract a broader customer base [5] - Strategic investments in technology are aimed at improving operational efficiency and expanding underwriting capabilities [8] - The company is positioned to deliver continued profitable growth as a disciplined, solution-oriented underwriting company [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of improved profitability and the ability to navigate competitive market dynamics [26] - The company anticipates continued attractive business opportunities despite increased competition [35] - Management highlighted the importance of disciplined underwriting and maintaining a conservative reserve posture to protect the balance sheet [17] Other Important Information - The board of directors declared a 25% increase in the quarterly cash dividend from $0.16 to $0.20 per share [11] - The company reported a strong capital position, allowing for flexibility in capital management and shareholder returns [22] Q&A Session Summary Question: Current pricing expectations in a competitive market - Management noted that while the market is more competitive, they are still achieving positive rates and will maintain disciplined risk selection to navigate the environment [26] Question: Long-term target for underwriting expense ratio - The target run rate for the expense ratio is around 35%, with expectations for gradual reduction over time as growth continues [30][31] Question: Margin compression in the assumed insurance business - Management acknowledged increased competition affecting rates and terms but emphasized their commitment to disciplined underwriting and long-term relationships [34] Question: Profitability dynamics in the other liability line - Management indicated pressure on profitability in the umbrella line due to large losses but is taking a conservative approach to pricing and reserves [36][39]

Financial Data and Key Metrics Changes - In 2025, the company achieved record underwriting profit of $67 million, up from $9 million in 2024, and net investment income increased by nearly 20% [6][7] - Full-year operating earnings per share improved by 80%, reaching $4.60, while book value per share grew by more than $6 to $36.88 [6][10] - The annual combined ratio improved to 94.8%, reflecting ongoing improvements in the underlying loss ratio, catastrophe loss ratio, and expense ratio [7][10] Business Line Data and Key Metrics Changes - The core commercial business, including small business, middle market, and construction, saw the strongest growth, contributing to a 9% increase in net written premium to over $1.3 billion [7][12] - Specialty E&S net written premium grew at a double-digit pace, while the surety business also delivered double-digit growth for the quarter and full year [15][16] - Rate increases moderated to 4.8% for the quarter, indicating a more competitive environment, particularly in property lines [13] Market Data and Key Metrics Changes - The company experienced a competitive market environment, particularly in property, but maintained a disciplined approach to underwriting and pricing [13][26] - The renewal of reinsurance treaties was successful, resulting in lower ceded margins and improved terms, despite exposure-adjusted rate decreases in major programs [19] Company Strategy and Development Direction - The company is focused on disciplined, solution-oriented underwriting, aiming for continued profitable growth and improved operational efficiency through strategic investments in technology [8][11] - The board of directors declared a 25% increase in the quarterly cash dividend, reflecting confidence in future financial performance and commitment to shareholder value [11][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning for 2026, emphasizing the successful transformation since late 2022 and the potential for sustainable growth [9][42] - The company is committed to maintaining a conservative posture with reserves to protect the balance sheet and is confident in achieving mid-teens return on equity targets [10][26] Other Important Information - The company reported a fourth-quarter net income of $1.45 per diluted share, with adjusted operating income of $1.50 per diluted share [21] - The expense ratio improved to 35.7%, with expectations for gradual reduction over time as growth continues [21][30] Q&A Session Summary Question: Current pricing expectations in a competitive market - Management acknowledged increased competition but maintained that pricing remains rational and attractive, with a focus on disciplined risk selection [25][26] Question: Long-term target for underwriting expense ratio - The company targets a run rate of about 35% for the expense ratio, with expectations for gradual reduction as growth continues [29][30] Question: Dynamics affecting profitability in the student insurance business - Management noted increased competition affecting rates and terms but emphasized disciplined underwriting and long-term commitments to maintain profitability [34][35] Question: Profitability issues in the other liability line - Management identified pressure on profitability in the umbrella line due to large losses but is taking a conservative approach to pricing and reserves [36][37] Question: Impact of nuclear verdicts on umbrella profitability - Management clarified that while social inflation impacts the portfolio, they have not seen significant nuclear verdicts affecting their business [38][39]

Financial Data and Key Metrics Changes - In 2025, Martin Marietta achieved revenues of $5.7 billion, a 7% increase year-over-year, and gross profit of $1.8 billion, up 13% [16] - The gross margin expanded by 173 basis points to 31%, driven by strong aggregates performance [16] - The aggregates business recorded revenues of $5 billion, an 11% increase, with gross profit rising 16% to $1.7 billion [16] - The gross profit per ton for aggregates improved by 12% year-over-year to $8.45 [10] Business Line Data and Key Metrics Changes - The aggregates business delivered record profitability with revenues increasing 8% to $1.2 billion in Q4, and gross profit rising 11% to $420 million [9] - The specialties business achieved record revenues of $441 million and gross profit of $137 million, reflecting strong organic performance and contributions from Premier Magnesia [17] - Other building materials revenues decreased 8% to $992 million, primarily due to the Minnesota asphalt business and the impact of the California paving divestiture [16] Market Data and Key Metrics Changes - Infrastructure demand remains solid, supported by the Bipartisan Infrastructure Investment and Jobs Act (IIJA), with 71% of highway and bridge funds obligated as of November 30, 2025 [11] - Heavy non-residential demand is driven by growth in data centers and energy projects, with Goldman Sachs estimating hyperscalers may deploy over $500 billion in capital in 2026 [13] - Residential construction faces affordability constraints, with Freddie Mac estimating a need for approximately 4 million additional homes to restore balance [14] Company Strategy and Development Direction - Martin Marietta's strategic focus is on enhancing its core aggregates platform while streamlining its portfolio, as evidenced by the launch of SOAR 2030 [21] - The company aims for low double-digit gross profit growth in aggregates, supported by low single-digit shipment growth and mid-single-digit pricing improvement [19] - The company is reviewing its quarry and terminal networks to align production with demand, which remains approximately 14% below 2022 levels [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the infrastructure investment pipeline and the potential for a new long-term surface transportation bill, which is expected to be passed on time [12][28] - The company anticipates a balanced macro environment in 2026, with expectations of sustained infrastructure investment and accelerating momentum in data centers and energy [11] - Management noted that while private construction remains soft, they are optimistic about the recovery in housing and non-residential construction [15] Other Important Information - Martin Marietta ended 2025 with a consolidated net debt to Adjusted EBITDA ratio of 2.3 times and total liquidity of $1.2 billion, providing capacity for M&A and share repurchases [18] - The company plans capital spending of $575 million in 2026, representing a 29% year-over-year reduction, which will increase free cash flow available for growth initiatives [19] Q&A Session Summary Question: Update on the new highway bill and its importance - Management indicated that the highway bill remains important but noted that states and municipalities have increased their funding capabilities, which may lessen the bill's overarching importance [24][25] Question: Clarification on guidance and potential slow start to the year - Management confirmed that the guidance includes all operations and indicated that January performance was resilient despite challenging weather conditions [33][37] Question: Insights on contract awards and market assumptions - Management provided a positive outlook for infrastructure, expecting mid-single-digit growth, while noting that non-residential construction remains below prior peaks [46][48] Question: Comments on pricing and gross profit per ton - Management expressed confidence in achieving pricing growth and indicated that the gross profit per ton guidance reflects a measured approach due to cost considerations [86][92]

Financial Data and Key Metrics Changes - The company reported total gross revenues of BRL 15 billion, reflecting a 45% year-on-year growth, while net revenues grew 31% year-on-year to BRL 8.4 billion [13] - Net interest income increased by 41% year-on-year, driven by strong performance in payroll loans, credit cards, mortgages, and home equity loans [13] - The efficiency ratio improved from 48.4% to 45.5%, indicating better operational leverage [17] Business Line Data and Key Metrics Changes - The loan portfolio grew by 36% year-on-year, with mortgages increasing by 48% and home equity loans by 35% [9] - The private payroll loans portfolio reached nearly BRL 2 billion, with around 400,000-500,000 clients, showcasing rapid product scaling [6] - Credit card volume grew by 29%, with interest-earning products now representing over 23% of the credit card portfolio, up from 19% last year [6][9] Market Data and Key Metrics Changes - The company processed 32,000 financial transactions per minute, totaling almost 1 billion transactions in December, with a significant increase in daily logins to over 21.5 million [3][4] - The transaction mix is evolving, with credit card transactions outpacing debit card transactions, positively impacting interchange fee income [5] - The company achieved a Pix market share of 8.5%, with ongoing efforts to replicate this success in other products [7] Company Strategy and Development Direction - The company is focused on continuous innovation across its seven verticals, which are interconnected to enhance client value and profitability [8] - The management emphasized the importance of technology and AI in improving efficiency and reducing costs, with plans for hyper-personalization and enhanced customer experience [70] - The company aims to maintain a balanced ratio of secured and unsecured loans while deepening credit penetration [9] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in achieving further growth in 2026, with expectations of continued loan growth and NIM expansion [19][66] - The company anticipates a cost of risk between 5.5% and 6% for 2026, with a focus on maximizing risk-adjusted NIM [50][66] - Management acknowledged the competitive landscape but highlighted their advantages in client base, funding costs, and digital distribution channels [73] Other Important Information - The company maintained a strong NPS of 85 points, indicating high customer satisfaction [4] - The average balance per active client reached BRL 2,100, with total funding growing by 32% year-on-year [11] - The company is preparing for an Investor Day on May 11th, where further insights into future strategies will be shared [20] Q&A Session Summary Question: Concerns about efficiency ratio progress - Management acknowledged the slower progress in efficiency but highlighted significant improvements in ROE and client growth, reaffirming commitment to the 60/30/30 plan [21][22] Question: Future dividend payments strategy - The company plans to maintain a 20% payout ratio for dividends, balancing growth and capital needs [25][27] Question: Fee income growth expectations - Management noted that fee income growth was impacted by accounting changes and competitive pressures but expects initiatives to drive future growth [31][36] Question: Provisioning and asset quality concerns - Management clarified that asset quality metrics are performing as expected, with adjustments made for more conservative risk assessments [46][49] Question: Private payroll loan growth and competition - The company is optimistic about the private payroll loan segment, leveraging its distribution channels and competitive advantages to sustain growth [58][73]

Financial Data and Key Metrics Changes - The company reported net operating revenues of $21.3 billion for 2025, with consolidated Adjusted EBITDA of $4.57 billion, representing a 14% growth over 2024 [5][13] - The full-year Adjusted EBITDA margin improved by 200 basis points to 21.4% compared to the prior year [5][14] - In Q4 2025, total net operating revenues were $5.5 billion, with consolidated Adjusted EBITDA of $1.183 billion, a 13% increase year-over-year [12][13] Business Line Data and Key Metrics Changes - The USPI segment's Adjusted EBITDA grew 12% in 2025 to $2.026 billion, with same-facility revenues increasing by 7.2% [6][14] - The hospital segment's Adjusted EBITDA increased by 16% to $2.54 billion, with same-store revenues per adjusted admission up 5.3% [7][14] - Same facility revenues grew 7.5%, driven by double-digit growth in total joint replacements in ASCs [7] Market Data and Key Metrics Changes - The company experienced strong same-store revenue growth, exceeding the long-term goal of 3%-6% organic growth [7] - In Q4, exchange volumes accounted for approximately 7.5% of total admissions and over 6% of consolidated revenues [69] Company Strategy and Development Direction - The company plans to continue focusing on organic growth supplemented by M&A, with nearly $350 million invested in 2025 and 35 facilities added to the portfolio [7][8] - The company expects to tackle expense management more structurally, leveraging technology for sustainable cost reductions [27][28] - The company anticipates a gradual tailwind from the phase-out of the Inpatient Only List starting in 2026, with opportunities in high acuity procedures [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong core earnings growth for 2026, despite anticipated headwinds from the expiration of enhanced premium tax credits [11][19] - The company expects full-year 2026 Adjusted EBITDA in the range of $4.485 billion to $4.785 billion, driven by ongoing demand strength and service line expansion [9][18] - Management acknowledged uncertainty regarding enrollment levels and effectuation rates, which could impact future performance [11][19] Other Important Information - The company repurchased approximately 22% of its outstanding shares for around $2.5 billion since the share repurchase program began in Q4 2022 [8][16] - The company generated $2.53 billion of free cash flow for the full year 2025, with $2.8 billion in cash on hand as of December 31, 2025 [15][16] Q&A Session Summary Question: Can you expand on the same-store hospital volume performance in the quarter? - Management noted that while acuity was good, the respiratory season was weaker than expected, impacting volumes [25] Question: What do you mean by tackling expense management more structurally? - Management explained that they are focusing on technology deployment for sustainable expense reductions, moving beyond traditional annual expense management [27][28] Question: Can you provide more details on the hospital admission growth guidance of 1%-2%? - Management indicated that the guidance reflects anticipated impacts from exchange exposure and investments in higher acuity capabilities [32] Question: Is the growth expected to be sustainable in future years? - Management expressed confidence in the sustainability of growth, citing a track record of acuity and revenue per case growth [39][40] Question: What is the payer mix for USPI in Q4? - Management reported a consistent payer mix, with net revenue per case growth of 5.5% and EBITDA margins above 40% [83]

Financial Data and Key Metrics Changes - The company reported Q4 2025 revenue of $440 million, reflecting an 11% quarter-over-quarter growth and a 14% year-over-year growth, meeting the target for sequential growth [6][37] - Q4 net profit was $80 million, representing an 18% net margin, up from 11% in Q1 2025, 13% in Q2 2025, and 14% in Q3 2025, indicating value-based growth driven by technology mix enrichment [6][38] - Full year 2025 revenue reached $1.566 billion, a $130 million or 9% increase compared to 2024 [7][40] Business Line Data and Key Metrics Changes - RF infrastructure revenue increased by 75% year-over-year, driven by hyperscaler adoption of silicon photonics in 800G and 1.6T pluggable transceivers [9] - Silicon germanium and silicon photonics revenues accounted for 27% of corporate revenues, totaling $421 million, up from $241 million in 2024 [10] - Power Management grew 20% year-over-year, representing 16% of corporate revenues in 2025 [23] - Sensors and displays grew 10% year-over-year, also representing 16% of corporate revenue [25] Market Data and Key Metrics Changes - RF mobile represented 23% of corporate revenue in 2025, with a 15% year-over-year decline due to a strategic shift towards higher value optical and RF offerings [20] - The company is experiencing strong demand for silicon photonics, with over 70% of total SiPho capacity reserved or in the process of being reserved through 2028 [28] Company Strategy and Development Direction - The company is increasing its CapEx plan for 2026 to accommodate stronger customer demand, with a total investment of $920 million aimed at expanding capacity [28][46] - The updated financial model targets $2.84 billion in annual revenue by 2028, reflecting a significant increase from 2025 levels [34][51] - The company is focusing on partnerships with leading customers, such as NVIDIA, to enhance technology offerings and manufacturing agility [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the updated financial model by 2028, citing strong customer demand and operational execution as key factors [80][87] - Concerns were raised regarding potential memory shortages impacting the mobile market, but management emphasized proactive planning and flexibility in production [92] Other Important Information - The company achieved a gross profit of $118 million in Q4 2025, a 26% increase from the previous quarter [38] - The effective tax rate for Q4 2025 was exceptionally low at 2% due to a non-recurring tax benefit [39] Q&A Session Summary Question: Clarification on NVIDIA collaboration - The company clarified that its role involves output parameters for photonics and alignment of supply needs, rather than direct shipping to NVIDIA [57] Question: Capacity increase related to NVIDIA demand - Management confirmed that the planned capacity increase is in response to total demand, including from NVIDIA [58] Question: Power business capabilities for high voltage - The company indicated it does not currently have an 800-volt platform on an IC but has higher voltage IC capabilities [63] Question: Shipping through resellers to NVIDIA - It was confirmed that the company ships through module makers or integrators rather than directly to NVIDIA [66] Question: CPO and end-to-end offerings - The company is working on multiple architectures for co-packaged optics but is not directly packaging CPUs [69] Question: Timeline for CapEx rollout - Management expects the majority of the $920 million CapEx to be online by Q3 2026, with full qualification targeted by December [72] Question: Silicon photonics contribution visibility - Management expressed confidence in the demand for silicon photonics and the operational execution needed to meet it [80][87] Question: Concerns about memory shortages - Management acknowledged concerns about memory shortages but emphasized close collaboration with customers to mitigate risks [92]

Financial Data and Key Metrics Changes - Fourth quarter overall net sales decreased 12% year-over-year to $1.1 billion, down from $1.2 billion in the prior year [26] - Adjusted EBITDA margins for the fourth quarter were 17%, consistent with expectations despite a weaker outage environment [4] - Gross profit margin decreased to 36.3% from 40.6% in the prior year, primarily due to unfavorable sales mix and a $15.6 million net inventory provision [30] - GAAP net loss for the quarter was $24 million, compared to net income of $117 million in the fourth quarter of 2024 [33] - Adjusted net income for the quarter was $95 million, or $1.61 per share, down from $168 million, or $2.80 per share in the prior year [34] Business Line Data and Key Metrics Changes - Residential product sales decreased 23% to $572 million, impacted by lower shipments of home standby and portable generators due to weak power outage activity [27] - Commercial and industrial (C&I) product sales increased 10% to $400 million, driven by revenue from data center customers [28] - International core total sales increased 5% during the fourth quarter, primarily due to revenue from data center customers [16] Market Data and Key Metrics Changes - The backlog for data center products has grown to approximately $400 million, indicating strong future demand [6] - Home standby shipments decreased 25% year-over-year, reflecting the lowest level of total outage hours in a decade [17] - The average power prices in the U.S. have increased nearly 40% over the last five years, with expectations to double again in the next decade [10] Company Strategy and Development Direction - The company is focusing on expanding its manufacturing capacity for large megawatt generators to meet the growing demand in the data center market [7] - Significant investments have been made in partnerships with hyperscalers, with expectations of substantial order volumes in 2027 and 2028 [5] - The company aims to double its C&I product sales in the coming years, capitalizing on the generational growth opportunity presented by data center investments [25] Management's Comments on Operating Environment and Future Outlook - Management noted that the power outage environment has been soft, impacting home standby and portable generator shipments, but expects a return to more normal levels in 2026 [18] - The company anticipates strong growth in C&I product sales, projecting an increase of over 30% in 2026, primarily driven by data center customers [38] - Management expressed confidence in the progress made in the data center market and expects 2026 to be an inflection point for growth [25] Other Important Information - The company has initiated 2026 net sales guidance projecting mid-teens growth compared to the prior year [37] - Capital expenditures for the full year are projected to be approximately 3.5% of forecasted net sales, focusing on incremental capacity investments [44] - The company has approved a new share repurchase authorization allowing for the repurchase of up to $500 million of shares over the next 24 months [36] Q&A Session Summary Question: Progress with hyperscalers - Management confirmed that while there are no significant orders yet, they are in pilot phases with two hyperscale customers and expect to sign longer-term supply agreements soon [49][52] Question: Competitive environment in the data center market - Management indicated that the market for large megawatt diesel generators has not changed significantly in terms of participants, with limited new entrants due to high investment requirements [58] Question: Growth profile for the data center market - Management estimates the total addressable market for data center backup generators could be as much as $15 billion annually, with a target market share of 10-15% [66] Question: Residential product demand and cost structure - Management highlighted a projected mid-teens growth rate for residential products, with half of the growth expected from price realization and the other half from volume increases as outages normalize [79]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported distributable earnings of $37 million, or $0.26 per diluted share, while for the full year, distributable earnings totaled $139 million, or $0.98 per diluted share [4] - GAAP net income available to common stockholders was $26 million, or $0.18 per diluted share for Q4, and $114 million, or $0.81 per diluted share for the full year [4] - The total CECL allowance stood at $383 million at year-end, equating to 418 basis points of the loan portfolio's total amortized cost, down from 457 basis points a year ago [6] Business Line Data and Key Metrics Changes - The company committed $1.3 billion to new loans in Q4, with $1.1 billion funded at close, and completed approximately $200 million of gross add-on fundings for previously closed loans [6] - Loan repayments and sales totaled $852 million in Q4 and $2.9 billion for the full year, reflecting continued portfolio rotation [7] - The loan portfolio increased by approximately $1.6 billion year-over-year on an amortized cost basis, ending the year at approximately $8.8 billion [8] Market Data and Key Metrics Changes - Over 60% of the loan portfolio is now represented by post-2022 origination, indicating a shift in the company's lending strategy [7] - The portfolio has a weighted average unlevered all-in yield of 7.3%, with 99% first mortgages and 96% floating rate exposure [8] Company Strategy and Development Direction - The company is focused on managing its real estate owned portfolio to improve cash flow and maximize value at exit, particularly through leasing and cost-saving initiatives [2][3] - Management is exploring options to unlock additional value from adjacent land parcels and is evaluating strategies for the REO assets [2][18] - The company is considering various strategies for future growth, including potential investments in mezzanine and construction lending, or leveraging Apollo's access to business lines [27][29] Management's Comments on Operating Environment and Future Outlook - Management received positive feedback from investors regarding efforts to unlock value, but there are questions about future capital strategies [11] - The company is currently evaluating specific internal ideas for future strategies, while also engaging with external proposals [13] - Management indicated that the REO portfolio is not critical to the future direction of the company, allowing for independent decisions on asset monetization [20] Other Important Information - The company ended the year with $151 million of total liquidity and held over $430 million of unencumbered assets [8][9] - Book value per share was $12.14 at year-end, relatively flat compared to the prior quarter [9] Q&A Session Summary Question: Feedback from investors regarding the transaction value and stock trading - Management noted overwhelmingly positive feedback but acknowledged questions about future capital strategies and the disconnect between book value and stock price [11][12] Question: Marketing strategy for REO assets and timing for monetization - Management indicated that stabilization of The Brook is expected later this year, and the decision to monetize will depend on market conditions [17][18] Question: Dividend policy post-portfolio sale - Management envisions paying a Q1 dividend of $0.25 per share, subject to board approval, and will discuss future dividends as they approach Q2 [25][26] Question: Strategy for creating an entity that trades above book value - Management is considering various strategies, including a focus on earnings streams and potential investments that offer higher returns [27][29]