Financial Data and Key Metrics Changes - The company achieved record profitability with a 30% year-over-year revenue growth, generating revenues of $3.8 million for Q4 2025, which is a 95% increase compared to the same period in the prior year [5][22] - Net income for Q4 2025 was $800,000, a significant improvement from a net loss of $2.9 million in the same quarter of the previous year, marking an increase of $3.7 million [22] - For the full year 2025, revenues totaled $11.3 million, up $2.6 million or 30% compared to the prior year, with net income reaching $6.8 million compared to a net loss of $3.1 million in 2024 [25][26] Business Line Data and Key Metrics Changes - The primary driver for revenue growth was higher digital game sales from the release of Le Mans Ultimate and increased downloadable content sales [22] - Revenues from the Le Mans franchise accounted for approximately 78% of total annual revenues in 2025, up from 34% in the previous year [48] - RaceControl, the company's subscription platform, contributed 11% of total revenues in 2025, compared to less than 1% in 2024, indicating a diversification of revenue streams [48] Market Data and Key Metrics Changes - Average concurrent players on Steam increased from approximately 786 in January 2025 to nearly 3,000 by December 2025, with a peak of over 8,700 concurrent players recorded in January 2026 [11][12] - The company noted that despite increased competition in the racing game market, Le Mans Ultimate continued to grow its player base and engagement [11] Company Strategy and Development Direction - The company is focused on scaling its platform and expanding its product offerings, with plans to bring Le Mans Ultimate to PlayStation and Xbox consoles, which represents a significant market expansion opportunity [18][19] - The strategy includes leveraging the RaceControl platform to create a hybrid revenue model combining game sales, downloadable content, and recurring subscription revenues [14][16] - The company is actively recruiting marketing talent to enhance its outreach as it prepares for console launches [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial stability and ability to continue building momentum through 2026 and beyond, emphasizing the successful turnaround achieved in 2025 [20][29] - The CEO highlighted the importance of product quality and community engagement in driving organic growth without significant marketing spend [12][29] Other Important Information - The company secured a $3 million revolving line of credit from Citibank in February 2026, which will support the development of Le Mans Ultimate for consoles [28] - As of December 31, 2025, the company had cash and cash equivalents of $5 million, which increased to $6 million by February 28, 2026, reflecting improved liquidity [26][27] Q&A Session Summary Question: What is the main driver for the decline in development costs year over year? - The company capitalized about $1.1 million of development costs related to significant upgrades and enhancements to the game, along with restructuring efforts that reduced payroll costs for developers and contractors [32][33] Question: Is AI a driver for the reduction in development costs? - AI is utilized in rapid iteration and development processes, contributing to faster updates and potentially lowering costs, while enhancing the creative output [34][35] Question: What is the expected impact of Le Mans Ultimate's console launch on revenue and margins? - The console launch is on track for early to mid-2027 and is expected to significantly expand the addressable market, providing a more accessible entry point for consumers [36][38] Question: How does the company plan to manage customer acquisition costs? - The company has invested very little in marketing, leading to organic growth, but is now looking to recruit marketing talent to broaden its audience [44][47]

Financial Data and Key Metrics Changes - The company achieved record quarterly billings of $111.2 million, representing an 8% year-over-year growth, the strongest in three years, and exceeding billing guidance for the quarter [4][23] - Full fiscal year billings reached $318.7 million, marking a 3% increase over the prior year, the first full year of billings growth since fiscal 2023 [23] - Gross retention rate improved to over 88%, the highest level in 12 quarters, reflecting strong customer relationships and progress in moving to a consumption pricing model [23][24] - Operating margin for the quarter was a record high of 10%, contributing to the highest full-year operating margin in company history at over 6% [25] - Adjusted free cash flow for the full year was near breakeven, an improvement of over $12 million from the prior year, representing the best full-year cash flow result [25] Business Line Data and Key Metrics Changes - The cohort of customers on consumption contracts achieved a net revenue retention of 111% in Q4, highlighting the value derived from the consumption model [6][24] - The company ended fiscal 2026 with 84% of annual recurring revenue on consumption pricing, a significant achievement [24] Market Data and Key Metrics Changes - Current subscription RPO grew 1% year-over-year to $227 million, while total subscription RPO grew 8% to $437.9 million, underscoring the strength of customer relationships [25][26] - Total revenue was above the high end of guidance at $79.6 million, with a gross margin of 78.2%, an improvement of over two percentage points year-over-year [26] Company Strategy and Development Direction - The company is focused on leveraging its innovative cloud data platform to benefit from the rapid adoption of AI, positioning itself as a strategic data and AI platform for modern business challenges [7][10] - The introduction of App Catalyst, an AI-powered app builder, aims to enhance customer engagement and drive deeper adoption of the platform [9] - The company is committed to operational efficiency while investing in key growth areas such as AI innovation and ecosystem partnerships [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing adoption of the consumption model and the potential for improved retention rates as more customers engage with the platform [34][36] - The company expects GAAP revenue to remain relatively flat, with modest improvement in non-GAAP EPS and positive adjusted free cash flow for the upcoming fiscal year [28] Other Important Information - Domo received significant recognition from industry analysts, including multiple awards for technology innovation and being recognized as a leader in AI analytics [21] - The company is actively engaging with customers to explore AI-driven solutions, which are increasingly becoming a core part of their operations [10][31] Q&A Session Summary Question: Competitive Environment and Win Rates - Management noted that customers are increasingly focused on implementing AI solutions, which highlights the platform's capabilities and has improved relationships with ecosystem partners [30][32] Question: Future Retention Rates - Management is encouraged by the net retention rate among consumption customers and expects continued improvement as they deepen customer engagement [33][36] Question: Sales Cycle Dynamics - The sales cycles have been mixed, with some deals taking longer due to the complexity of global data strategies, while others are closing more quickly as relationships with ecosystem partners strengthen [47][50] Question: Customer Spending Mechanisms - The company has seen significant usage of partner marketplace funds to purchase Domo services, leading to longer contract renewals and upsells [54][58] Question: Consumption Customer Usage - Management indicated that net revenue retention for consumption customers is a strong indicator of increased usage, with ongoing efforts to enhance customer engagement and explore the platform [61][68]

Financial Data and Key Metrics Changes - The company reported an adjusted net loss of $21 million in Q4 2025, compared to a loss of $3 million in Q3 2025, primarily due to lower pull-through weighted gain on sale margin and higher amortization on the MSR portfolio [11][12] - Adjusted total revenue for Q4 2025 was $316 million, down from $325 million in Q3 2025 [12] - Pull-through weighted lock volume increased by 4% to $7.3 billion in Q4 2025 from $7 billion in Q3 2025 [11] - Loan origination volume reached $8.0 billion in Q4 2025, a 23% increase from $6.5 billion in Q3 2025, marking the highest level since 2022 [13][18] Business Line Data and Key Metrics Changes - Servicing fee income increased slightly from $112 million in Q3 2025 to $113 million in Q4 2025, reflecting growth in the unpaid principal balance of the servicing portfolio [14] - The company originated fewer higher-margin second trust deeds and FHA, VA loans in Q4 2025, which contributed to larger average loan balances but decreased margin percentage [13] Market Data and Key Metrics Changes - The company gained market share in an expanding market, achieving a 71% recapture rate from its in-house servicing platform [4] - The retail lending market remains fragmented, with no lender controlling more than 5% market share, presenting significant opportunities for customer-facing scaled originators [5] Company Strategy and Development Direction - The company aims to leverage its digital-first direct lending business and in-market retail business to capture profitable market share growth across refinance, resale, and new home loans [45] - A focus on operational efficiency and technology investments is expected to drive growth and improve customer experience [9][18] - The company plans to re-enter the wholesale lending channel to achieve greater scale and improve operating efficiency [41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for market consolidation and the benefits for large-scale, diversified customer-facing originators [4] - The company anticipates a larger refinance market and aims to improve customer acquisition and retention through technology and AI [9][18] - Management expects Q1 2026 pull-through weighted lock volume to be between $7.75 billion and $8.75 billion, with origination volume between $6.75 billion and $7.75 billion [16] Other Important Information - The company ended Q4 2025 with $337 million in cash, a decrease of $222 million from Q3 2025, reflecting investments in loan inventory and repayment of unsecured notes [18] - Year-over-year, adjusted revenue increased by 10% while limiting expense growth to less than 1%, resulting in a 31% reduction in adjusted net loss [18] Q&A Session Summary Question: Can you expand on your profitable share gains and where you're seeing success? - Management highlighted a diversified retail customer touch model, with growth in the builder business and opportunities in direct lending, emphasizing the need to rebuild marketing and lead management systems [21][26] Question: What are your expectations for non-volume related OpEx and profitability in 2026? - Management indicated modest investment in technology and innovation initiatives, with most expense growth being volume-related due to loan officer additions [28][29] Question: What is the expected run rate for amortization expense going forward? - Management noted that the increase in amortization expense was related to higher refinance volumes and may moderate depending on future interest rates [33][34] Question: Can you discuss the strategy for re-entering the wholesale lending channel? - Management explained that re-entering wholesale lending will allow for greater scale and improved operating efficiency, with expectations for margin expansion as refinance volume returns [40][41] Question: What level of recapture are you targeting going forward? - Management stated that they aim to maintain a recapture rate around 71%, with potential for improvement through technology and AI advancements [42]

Financial Data and Key Metrics Changes - The company achieved record quarterly billings of $111.2 million, representing an 8% year-over-year growth, the strongest in three years, and exceeding billing guidance for the quarter [4][23] - Full fiscal year billings reached $318.7 million, marking a 3% increase over the prior year, the first full year of billings growth since fiscal 2023 [23] - Gross retention rate improved to over 88%, the highest level in 12 quarters, reflecting strong customer relationships and progress in moving to a consumption pricing model [23][24] - Operating margin for the quarter was a record high of 10%, contributing to the highest full-year operating margin in company history at over 6% [25] - Adjusted free cash flow for the full year was near breakeven, an improvement of over $12 million from the prior year, representing the best full-year cash flow result [25] Business Line Data and Key Metrics Changes - The cohort of customers on consumption contracts achieved a net revenue retention of 111% in Q4, highlighting the value derived from the consumption model [6][24] - The company ended fiscal 2026 with 84% of annual recurring revenue on consumption pricing, a significant milestone [24] Market Data and Key Metrics Changes - Current subscription RPO grew 1% year-over-year to $227 million, while total subscription RPO grew 8% to $437.9 million, underscoring the strength of customer relationships [25][26] - Total revenue was above the high end of guidance at $79.6 million, with a gross margin of 78.2%, an improvement of over two percentage points year-over-year [26] Company Strategy and Development Direction - The company is focused on leveraging its innovative cloud data platform to benefit from the rapid adoption of AI, positioning itself as a strategic data and AI platform rather than just a BI tool [7][10] - The introduction of App Catalyst, an AI-powered app builder, is expected to drive increased consumption and deeper adoption of the platform [9] - The company aims to optimize spending while continuing to invest in key growth areas such as AI innovation and ecosystem partnerships [28] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are increasingly interested in implementing AI solutions that are governed and secure, which highlights the company's platform capabilities [31] - The company expects GAAP revenue to remain relatively flat, with modest improvement in non-GAAP EPS and positive adjusted free cash flow for the upcoming fiscal year [28] Other Important Information - The company received significant recognition from industry analysts, including multiple awards for technology innovation and being recognized as a leader in AI analytics [21] - The upcoming Domopalooza user conference is highlighted as an opportunity for customers and partners to connect and explore innovations [21] Q&A Session Summary Question: Competitive Environment and Win Rates - Management noted that customers are increasingly discussing AI and agentic opportunities, which has positively impacted win rates against competitors [30][31] Question: Future Gross Retention and NRR - Management expressed optimism about the net retention rate for consumption customers, expecting upward trends as adoption increases [33][36] Question: Sales Cycle Dynamics - Management acknowledged that while some deals are taking longer due to involvement with C-suite executives, there are also quicker deals emerging, particularly with existing customers [47][50] Question: Use of Partner Marketplace Funds - Management confirmed that Q4 saw significant usage of partner marketplace funds to purchase Domo, leading to longer contract renewals and upsells [54][58] Question: Consumption Customer Usage - Management indicated that net revenue retention for consumption customers is a strong indicator of increased usage, with expectations for continued growth in this area [67][68]

Financial Data and Key Metrics Changes - Revenue increased by 5% year-over-year to $90.6 million from $86.4 million in the prior year quarter [9] - Adjusted EBITDA rose by 6% to $18 million compared to $17 million in the year-ago quarter, with an adjusted EBITDA margin remaining consistent at 20% [12][13] - Net loss attributable to common shareholders was $2.9 million or $0.06 per diluted share, compared to a net loss of $3.1 million or $0.06 per diluted share in the prior year quarter [12] Business Line Data and Key Metrics Changes - Revenue in the U.S. Concrete Pumping segment increased by 5% to $59.9 million, driven by higher volumes in commercial and infrastructure activities, particularly data center projects [10] - Revenue in the Concrete Waste Management Services segment increased by 8% to $18.1 million, supported by organic volume increases and pricing improvements [11] - U.K. operations saw a slight decline in revenue to $12.5 million from $12.8 million, attributed to adverse weather and economic uncertainty affecting commercial construction [11] Market Data and Key Metrics Changes - The commercial end market showed renewed growth, particularly in large-scale data center projects, while residential construction remained soft due to elevated interest rates [4][5] - Infrastructure activity remained consistent, with optimism regarding public infrastructure spending as federal funding approaches expiration [7][8] - U.K. commercial project volumes were negatively impacted by interest rates and economic uncertainty, although infrastructure projects, especially energy-related, remained resilient [8] Company Strategy and Development Direction - The company is focused on disciplined growth strategy, maintaining commercial leadership, and investing strategically in equipment to enhance competitive advantage [19] - Capital investment plans remain on track, with an emphasis on fleet management and efficiency to support margins and long-term shareholder value [8][17] - The company is committed to disciplined capital deployment and prioritizing returns on invested capital while remaining open to value-accretive acquisitions [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the start of the year, citing strong performance in commercial operations and data center-related activity [18] - The company remains cautious about certain end markets, particularly residential construction, but is encouraged by the momentum in commercial operations [18] - Guidance for fiscal 2026 remains unchanged, expecting revenue between $390 million and $410 million and adjusted EBITDA between $90 million and $100 million [16] Other Important Information - Total debt outstanding as of January 31, 2026, was $425 million, with net debt of $372 million, representing a net leverage ratio of approximately 3.8x adjusted EBITDA [14] - The company ended the quarter with approximately $350 million of available liquidity, providing substantial financial flexibility [15] - Share repurchase program has seen approximately 651,000 shares repurchased for $4 million, demonstrating commitment to enhancing shareholder value [15] Q&A Session Summary Question: Momentum in Business - Analyst inquired about the positive momentum in business and specific end markets contributing to growth, particularly data center work [24] - Management noted better weather, stronger-than-expected data center work, and improving infrastructure activity as key factors [25] Question: Impact of Energy Costs - Analyst asked about the potential impact of high oil prices on margins and guidance for EBITDA [27] - Management acknowledged fuel prices as a concern but mentioned existing fuel surcharges in agreements to mitigate costs [28] Question: Revenue Growth Breakdown - Analyst requested a breakdown of revenue growth between volume and pricing [32] - Management indicated that revenue growth was approximately 2% from volume and 3% from pricing, aided by better weather [33] Question: Capital Expenditure Acceleration - Analyst sought clarification on the status of accelerated capital expenditures [34] - Management confirmed that the anticipated $22 million investment is planned for the year, with potential delivery concerns for new trucks [35]

Financial Data and Key Metrics Changes - For the full year 2025, the company reported GAAP net income of $110 million, or $5.04 per share, a 175% improvement compared to the prior year [4] - Adjusted net income for the full year was $74 million, or $3.04 per share, representing a 429% increase from 2024 [4][14] - Adjusted EBITDA for the year was $143 million, a 138% increase year-over-year [5][14] - Total revenue increased by 26% year-over-year to $497 million in 2025, compared to $394 million in 2024 [14] Business Line Data and Key Metrics Changes - The company funded $2.4 billion of originations in 2025, a 24% increase from $1.9 billion in 2024 [5][9] - Fourth quarter volume totaled $619 million, reflecting strong sequential performance [6][9] - The company recognized $47 million in adjusted net income for the second half of 2025, or adjusted earnings per share of $2.05, which annualizes to approximately $4.10 per share [16] Market Data and Key Metrics Changes - Inquiry volume in January increased more than 75% year-over-year, with speed to answer calls improving by over 60% [9] - Google Trends data shows reverse mortgage-related search activity trending approximately 40% higher year-over-year at seasonal peaks [11] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet and improving alignment while operating in a dynamic market environment [4] - An agreement was announced to acquire the reverse mortgage servicing portfolio from PHH Mortgage, expected to close in the second quarter, which will expand the servicing platform [6] - The company aims to grow volume by 15%-25% year-over-year for 2026, supporting adjusted earnings per share guidance of $4.25-$4.75 [17][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's earnings power becoming more visible and durable as the business scales [20] - The company anticipates cash flows from core operations will be sufficient to fund acquisitions and pay down debt [18][20] - Management highlighted that demographic trends continue to support long-term demand for responsible home equity solutions [21] Other Important Information - The company ended 2025 with a tangible equity position 117% greater than December 2024 [18] - The company generated over $150 million in cash flows through core origination and capital markets activities during 2025 [18] Q&A Session Summary Question: Clarification on balance sheet and cash uses - The company plans to focus on retiring $150 million of corporate debt before considering further share repurchases [24][32] Question: Cash generation and stock buyback - The company expects to pay off the entire $150 million of corporate debt this year, allowing for potential share repurchases in 2027 [32] Question: Key earnings measure - Management emphasized that Adjusted EPS is the most important measure, with guidance for 2026 set at $4.25-$4.75 [33] Question: Share repurchase timing - The company is currently focused on retiring corporate debt, but share repurchase options could be considered as the year unfolds [37]

Financial Data and Key Metrics Changes - The company reported a Q4 2025 operating income of $8.2 million, a significant improvement of $41.1 million compared to a loss of $32.9 million in Q4 2024 [8][34] - Q4 2025 net income was $5.2 million, compared to a net loss of $34.6 million in the same quarter last year, marking the second consecutive quarter of positive net income [9][35] - Adjusted EBITDA for Q4 2025 was $12.9 million, a 48% increase from $8.7 million in Q4 2024, representing the ninth consecutive quarter of positive adjusted EBITDA [9][35] - The company achieved a cash balance of $39 million against an outstanding debt of $25 million, providing a cash cushion of $14 million above the required $4.6 million [7][17] Business Line Data and Key Metrics Changes - Digital revenue for Q4 2025 decreased by 5.8% sequentially to $34.3 million and declined 31.9% year-over-year, reflecting continued pressure on digital subscriptions [31] - Nutrition and other revenue decreased 9.6% from the prior quarter to $21.2 million and fell 39% year-over-year, although nutrition subscriptions increased 14.3% sequentially [32] Market Data and Key Metrics Changes - The company is transitioning from a multi-level marketing model to an omni-channel model, which has impacted revenue comparisons due to the legacy business shutting down [4][30] - The nutrition supplement market is significantly larger than the digital fitness market, valued at $164 billion compared to the digital fitness category [11] Company Strategy and Development Direction - The company is focusing on a new omni-channel model that includes direct-to-consumer sales, retail distribution, and a revamped affiliate program [4] - A major innovation pipeline is set to launch in 2026, including the 10 Minute BODi program aimed at a broader audience [10][20] - The company plans to enter the retail market with new nutritional products, leveraging established brand names like P90X and Shakeology [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial turnaround, achieving positive operating income and net income a year ahead of schedule [8][17] - The company anticipates that Q3 2026 will be the first quarter for clean year-over-year comparisons, as the legacy business model elements will have been phased out [18][39] - Management highlighted the importance of maintaining financial discipline while reallocating marketing spend towards new initiatives [46] Other Important Information - The company has successfully reduced its break-even point from over $900 million to $180 million, enhancing operational leverage [17] - The transition to a new Shopify e-commerce platform is expected to improve customer experience and sales conversion rates [26][68] Q&A Session Summary Question: What are management's priorities moving forward? - Management emphasized that profitability remains a primary focus, but there will be a reallocation of marketing spend towards new initiatives [44][46] Question: Any early reads on the P90X launch? - Initial customer response has been positive, with solid uptake among subscribers, but it is still early to assess long-term success [48][50] Question: How is the consumer response to the 10 Minute BODi program? - The program has shown strong initial uptake, with 8% of viewership coming from microdose fitness workouts, indicating a positive trend [57][60] Question: What is the status of the nutritional brick-and-mortar rollout? - The company is in discussions with multiple retailers, with Sprouts Farmers Market confirmed for a launch in May 2026 [66][68] Question: How relevant is the Beachbody brand to younger consumers? - The company is focusing on the BODi brand to appeal to a broader audience, while leveraging the legacy of established brands like Shakeology and P90X [79][80]

Financial Data and Key Metrics Changes - The stock price increased from $5.88 per share at year-end 2024 to $9.44 at the end of 2025, representing an increase of over 60% [22] - Total shareholder return approximated 70%, including a $0.50 dividend per share declared and paid during the year [22] - Net asset value (NAV) grew from $6.68 at the end of 2024 to $8.09 at the end of 2025, a year-over-year growth of approximately 21% [23] - On a dividend-adjusted basis, the NAV would have been $8.59 per share, representing a year-over-year growth of approximately 29% [24] Business Line Data and Key Metrics Changes - The top five positions in the investment portfolio as of December 31st were OpenAI, Whoop, Blink Health, Canva, and Learneo, accounting for approximately 54% of the investment portfolio at fair value [35] - The largest allocation of the investment portfolio was to artificial intelligence infrastructure and applications, representing approximately 31% [35] Market Data and Key Metrics Changes - The global build-out of AI infrastructure is accelerating, indicating a structural shift in the economy [10] - Capital commitments to AI are rising, suggesting that AI is becoming core infrastructure for businesses [11] Company Strategy and Development Direction - The company aims to provide public market investors access to venture-backed private companies earlier in their life cycles [19] - The strategy focuses on quality, asymmetry, and long-term shareholder value, with a commitment to disciplined capital allocation [22][25] - Recent investment in TensorWave reflects a focus on the rising demand for AI compute and a strategic alignment with AMD [26][59] Management's Comments on Operating Environment and Future Outlook - Management believes that AI represents a multi-year structural transformation that is still in its early stages [17] - The company is confident in its portfolio and sees meaningful embedded upside and a strong liquidity position [28] - Management expects significant value creation from ongoing financings, which are not yet reflected in the year-end NAV [12][13] Other Important Information - The company ended the year with approximately $50.1 million of liquid assets, including approximately $49 million in cash [43] - The board approved an extension of the discretionary share repurchase program until October 31st, 2026, for the repurchase of $64.3 million in common stock [41] Q&A Session Summary Question: Timeline for expected financings contributing to NAV - Management believes all financings will be completed by the end of the quarter, though announcements may vary [50] Question: Drivers of expected NAV appreciation - Significant portfolio positions are driving the expected appreciation, influenced by market conditions [53] Question: Base case numbers for investment income and operating expenses - The company does not generate income outside of realized capital gains, and operating expenses are expected to remain static [56] Question: Dynamics of the $20 million investment in TensorWave - The investment reflects a unique opportunity aligned with AMD, but not all investments will reach this size [60] Question: Private market valuations versus public market valuations - There is a notable separation between private and public valuations, with private market growth exceeding public market growth [64]

Financial Data and Key Metrics Changes - The company achieved record profitability with a 30% year-over-year revenue growth, generating revenues of $3.8 million for Q4 2025, which is a 95% increase compared to the same period in the prior year [5][19] - For the full year 2025, revenues were $11.3 million, up $2.6 million or 30% compared to the prior year, with net income of $6.8 million compared to a net loss of $3.1 million in 2024 [22][23] - Adjusted EBITDA for Q4 2025 was $1.9 million, compared to an adjusted EBITDA loss of $2.5 million for the same period in the prior year [20] Business Line Data and Key Metrics Changes - The increase in revenues was primarily driven by higher digital game sales from the release of Le Mans Ultimate and higher downloadable content sales [19] - Revenues from the Le Mans franchise accounted for approximately 78% of total annual revenues in 2025, compared to 34% in the previous year [43] Market Data and Key Metrics Changes - Average concurrent players on Steam increased from approximately 786 in January 2025 to nearly 3,000 by December 2025, with a peak of over 8,700 concurrent players in January 2026 [11] - The company has seen organic growth without significant marketing spend, indicating strong player engagement and community support [11][12] Company Strategy and Development Direction - The company is focusing on scaling its Race Control platform, which combines game sales, DLC content, and recurring subscription revenues, creating a more stable financial model [14][15] - Plans are underway to bring Le Mans Ultimate to PlayStation and Xbox, which represents a significant expansion of the addressable market [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue building momentum through 2026 and beyond, emphasizing that the turnaround phase is behind them [26] - The company is actively recruiting marketing talent to raise awareness of its product offerings as it prepares for console launches [12][39] Other Important Information - The company secured a $3 million revolving line of credit from Citibank in February 2026, which will support the development of Le Mans Ultimate for consoles [25] - The working capital improved significantly, with a positive working capital of $4.2 million as of December 31, 2025, compared to negative working capital of $2.2 million in the previous year [25] Q&A Session Summary Question: What is the main driver for the decline in development costs? - The company capitalized about $1.1 million of development costs related to significant upgrades and enhancements to the game, which contributed to the decrease in development costs [28] Question: Is AI a driver for the reduction in development costs? - AI is utilized in rapid iteration and development processes, helping to bring updates to market faster and potentially reducing costs [30][31] Question: What is the expected impact of Le Mans Ultimate on revenue and margins upon its console launch? - The product is on track for release in early to mid-2027, with expectations of a significant impact on revenue due to the larger addressable market on consoles [32][34] Question: How does the company anticipate AI to improve customer acquisition costs? - The company has invested very little in marketing, leading to low customer acquisition costs, and is looking to leverage AI to enhance efficiency in various business areas [38][41]

Financial Data and Key Metrics Changes - Oracle reported a strong Q3 fiscal year 2026, with both organic total revenue and organic non-GAAP EPS growing by 20% or more in USD, marking the first time in over 15 years this has occurred [6][10] - Cloud applications revenue increased by 11% in constant currency, reaching an annualized run rate of $16.1 billion [10] - Deferred revenue for cloud applications grew by 14%, supporting the acceleration thesis [20] Business Line Data and Key Metrics Changes - Within cloud applications, Fusion ERP revenue grew by 14%, Fusion SCM by 15%, Fusion HCM by 15%, and Fusion CX by 6% [10] - NetSuite revenue also increased by 11%, while industry SaaS solutions across various sectors grew by 19% [10] - Multi-cloud database revenue surged by 531% year-over-year, and AI infrastructure revenue grew by 243% year-over-year [21] Market Data and Key Metrics Changes - Oracle achieved significant growth in its partnerships with major cloud providers, expanding its database services across multiple clouds [21][23] - The company reported a $553 billion remaining performance obligation (RPO), indicating strong future revenue potential [24] Company Strategy and Development Direction - Oracle is focusing on integrating AI into its applications, with over 1,000 AI agents already embedded in its Fusion applications [68][79] - The company is positioning itself as a disruptor in the SaaS market by embedding AI capabilities directly into its applications, rather than viewing AI as a replacement for existing systems [68][79] - Oracle's strategy includes leveraging its multi-cloud partnerships to enhance its database services and AI infrastructure [21][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for AI and advanced compute capabilities, anticipating continued growth across the economy [28] - The company is optimistic about its ability to deliver profitable recurring revenue from its AI infrastructure and multi-cloud database services [27][28] - Management highlighted the importance of maintaining an investment-grade rating while pursuing significant financing to support growth initiatives [39] Other Important Information - Oracle raised $30 billion through investment-grade bonds and mandatory convertible preferred stock, with a record oversubscription [8] - The company is committed to maintaining a rapid financial reporting process, leveraging Oracle Fusion to close and file results faster than competitors [9] Q&A Session Summary Question: Insights on AI infrastructure's halo effect on traditional cloud workloads - Management confirmed a positive halo effect from AI infrastructure on traditional cloud workloads, with increased business activity and pipeline growth [32][34] Question: Data center location strategy for AI inferencing - Management discussed the importance of data center location in relation to latency and the evolving demand for inferencing capabilities [42][44] Question: Opportunities with AI database and private LLMs - Management noted a growing demand for integrating private data with AI models, emphasizing the importance of cloud adoption for leveraging AI [50][51] Question: Profitability of AI data centers and sovereign cloud strategy - Management expressed confidence in the profitability of AI data centers, highlighting the mix of services that contribute to overall margins [56][61] Question: Customer sentiment regarding SaaS and AI - Management reported that customers are not abandoning their core systems but are instead seeking to integrate AI capabilities into existing applications [67][68] Question: Oracle's evolving role in AI across enterprise systems - Management emphasized the significance of data gravity and the integration of AI agents within Oracle's applications to enhance customer value [72][79]