Financial Data and Key Metrics Changes - For the full year 2025, pro forma revenue was $879.6 million, down 13.6% year-over-year, primarily due to project completions and client exits [14] - Pro forma gross margin was 21.9%, an increase of 30 basis points year-over-year, driven by a favorable sales mix [15] - Pro forma normalized EBITDA was $90.2 million, a decrease of 13.7% year-over-year, with a normalized EBITDA margin flat at 10.3% [16] - In Q4 2025, total revenue was $207 million, a decline of 15.1% year-over-year, while gross margin increased by 110 basis points to 22.7% [16] - Normalized EBITDA for Q4 was $19.2 million, a decline of 35% year-over-year [16] Business Line Data and Key Metrics Changes - The Applied Workflow Automation segment, which contributes approximately 90% of revenues, saw a year-over-year revenue decline of 15.1% on a pro forma basis, but gross margins increased by 140 basis points to 18.4% [19][20] - The technology segment, making up about 10% of revenues, experienced a revenue decline of 14.6% year-over-year but increased 1% sequentially to $21.7 million [20] Market Data and Key Metrics Changes - The European region saw revenue growth of 4.7% year-over-year, with gross margins increasing by 130 basis points to 28.1%, well above the consolidated gross margins [21] - The company has a diversified base of over 2,500 clients, with no single client accounting for more than 7.5% of revenue [12] Company Strategy and Development Direction - The company is focused on integrating two platforms into one and becoming an AI-led organization, aiming for margin expansion and sustainable long-term growth [4][5] - The strategy includes investing in growth by hiring a new Chief Revenue Officer and expanding the sales team [4] - The company emphasizes human accountability and domain expertise as key competitive advantages in highly regulated environments [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges headwinds from the broader macroeconomic environment but sees potential for improvement in margins and a transition to an AI-led provider of mission-critical workflows [13] - The company is optimistic about the sales momentum, with significant increases in new TCV and ACV bookings in Q4 [17][25] Other Important Information - The company is undergoing a transformation to disrupt legacy workflows and enhance operational efficiency through AI [5][6] - The focus on ROI and sustainability of contracts is highlighted as a critical aspect of the company's strategy moving forward [8] Q&A Session Summary - The Q&A session was not conducted as the call concluded without any questions being taken from participants [27]

Financial Data and Key Metrics Changes - Total revenue for the full year 2025 was approximately $3.4 million, a decrease of about $1.3 million or 28% compared to $4.7 million in 2024, reflecting a strategic shift away from legacy contract work toward higher value commercial space-based and AI-driven solutions [24][28] - Cost of revenue increased to approximately $9.1 million, a 48% increase from $6.1 million in 2024, driven by increased depreciation and changing contract mix [24][25] - Gross loss for the year was approximately $5.7 million compared to a loss of about $1.5 million in 2024, influenced by increased depreciation and the transition away from high-margin contracts [25][26] - Net loss for the year was $29.5 million compared to $17.5 million in 2024, primarily due to strategic investments in infrastructure and personnel [28] Business Line Data and Key Metrics Changes - The company launched three LizzieSat satellites between March 2024 and March 2025, demonstrating increasing capability across design, operations, and mission performance [7] - LizzieSat-1 successfully established communications and completed its mission, while LizzieSat-2 is in the commissioning phase, and LizzieSat-3 is supporting recurring customer payload operations [9][10] Market Data and Key Metrics Changes - The geopolitical environment has shifted, emphasizing the growing importance of space as a national security domain, which aligns with the company's focus on defense and commercial missions [5][6] - The company is actively engaged with both commercial and Department of Defense customers to address growing demand for cost-efficient satellite platforms [20] Company Strategy and Development Direction - The company aims to be a leading innovator in space and defense technologies, focusing on delivering cost-effective solutions that enable multi-domain operations [6][14] - The strategy includes a dual-use multi-mission model that creates diversified revenue streams and broadens customer opportunities [8] - The company is focused on accelerating commercialization and expanding in defense markets while reducing reliance on lower-margin contract manufacturing [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the impact of broader market conditions and volatility on stock performance, emphasizing the importance of execution and advancing a scalable product model [31][32] - The company is focused on building a more durable business with higher margin, repeatable revenue streams, and is committed to maintaining a disciplined approach to capital allocation [32][34] Other Important Information - The company raised approximately $53.3 million in net proceeds from the issuance of shares, entering 2026 with no outstanding term debt [29] - The company has implemented meaningful cost reduction activities and operational efficiencies to support long-term profitability [29] Q&A Session Summary Question: Concerns about stock performance - Management recognizes concerns regarding stock performance, attributing it to broader market conditions and the timing of revenue as the company transitions its business model [31] Question: Future revenue streams and business model - The company is focused on converting validated technology into repeatable revenue streams and margin expansion, emphasizing execution over commentary [35]

Financial Data and Key Metrics Changes - Total revenue for fiscal year 2025 was $4.6 million, down 36% from $7.2 million in the prior year, reflecting a strategic exit from lower quality revenue and customer churn during the platform transition [15][17] - Subscription revenue now represents 98% of total revenue, up from 87% a year ago, indicating a shift towards more predictable and high-margin revenue [16] - Gross margin expanded to 87%, up five points from 82% in 2024, driven by disciplined cloud cost management and platform efficiency gains [16][18] - The company ended the year with a cash balance of $11.1 million, providing a runway to cover expenses for the next six quarters [16][24] Business Line Data and Key Metrics Changes - The company executed a strategic transformation focused on high-quality recurring revenue, transitioning from one-time services to subscription models [10][12] - Operating expenses increased by 10% to $21.6 million, primarily due to R&D investments, while sales and marketing expenses were cut by 36% [19][20] - The underlying operating loss was approximately $15.4 million, roughly in line with the prior year, indicating a focus on building the platform despite revenue decline [20][24] Market Data and Key Metrics Changes - The AI agent market is projected to grow from $7.8 billion to $52 billion by 2030, with 40% of enterprise apps expected to feature task-specific AI agents by the end of 2026 [8][43] - Enterprises are consolidating their technology solutions, moving away from point solutions towards unified experience solutions, which aligns with the company's offerings [25][43] - The demand for agentic AI has become a baseline requirement in procurement discussions, with executive buyers specifying AI capabilities as essential [25][43] Company Strategy and Development Direction - The company is positioning itself as a leader in agentic AI, focusing on a comprehensive platform that integrates workflows, data, and physical environments [9][43] - The strategic transformation is built on four pillars: prioritizing subscription revenue, implementing an AI-driven cost structure, building an AI-native platform, and balancing short-term impact with long-term scalability [10][12] - The company aims for sustainable high-quality revenue growth, emphasizing subscription expansion over one-time fees [31][43] Management's Comments on Operating Environment and Future Outlook - Management views 2026 as a year of AI-driven acceleration, expecting double-digit growth fueled by the agentic AI platform [27][31] - The company is optimistic about large enterprise wins and strong pipeline conversion, with procurement conversations evolving to evaluate the company as a complete platform [25][28] - The reset of 2025 is seen as complete, with a stronger product and validated market demand entering 2026 [44] Other Important Information - The company has filed 39 patents, including a recent provisional patent on agentic AI, which is considered a landmark in the industry [3][35] - The partnership with TouchSource is expected to create new distribution channels and expand the company's addressable market significantly [39][40] Q&A Session Summary Question: Are you in danger of being delisted? - The company received a delisting notice from Nasdaq but has been granted an extension until September and plans to become compliant before that date [46][47] Question: What can investors look forward to from the company in the near future? - The company expects to grow in double digits and is seeing momentum with new customers and renewals [49][50] Question: How do you plan on setting yourself apart from other AI companies? - The company differentiates itself through a vertically integrated solution focused on campus environments, providing security and privacy that large clients require [52][53] Question: Can you contextualize the double-digit growth target relative to the 20+ customer pipeline? - The company anticipates more growth from new logos and has had more than five renewals in 2025, with clients making long-term commitments [56][59]

Financial Data and Key Metrics Changes - Revenues for the quarter were flat on a reported basis and down 3% on a currency neutral basis [23] - Gross margins declined 130 basis points to 40.2%, primarily due to 300 basis points associated with higher tariffs in North America [24] - Earnings per share was $0.35 [24] - Inventory decreased 1% versus the prior year, with units down mid-single digits [24] Business Line Data and Key Metrics Changes - Nike Direct was down 7%, with Nike Digital declining 9% and Nike stores down 5% [23] - Wholesale grew 1% [23] - Sportswear continues to be a headwind to revenue growth, declining low double digits in the quarter [22] - Nike Running was up over 20% for the quarter, while global football is expected to transform with the upcoming World Cup [10][11] Market Data and Key Metrics Changes - North America revenue grew 3%, with running and global football showing double-digit growth [26] - EMEA revenue was down 7%, with Nike Direct declining 13% and Nike stores down 20% [28] - Greater China revenue declined 10%, with Nike Direct down 5% and wholesale down 13% [29] - APLA revenue was down 2%, with Nike Direct declining 8% [31] Company Strategy and Development Direction - The company is focused on a comeback strategy, emphasizing the removal of unhealthy inventory and improving marketplace health [5][6] - A new leadership team is in place to strengthen various business segments, including Greater China and Converse [7][20] - The company plans to share a more detailed long-term view at an upcoming Investor Day [9] - The strategy includes a shift from a Nike Direct first offense to a more integrated marketplace approach [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the comeback is taking longer than expected but remains confident in the strategic direction [21][34] - The company expects revenues to be down low single digits for the upcoming quarters, with North America showing modest growth [33] - Management is focused on managing inventory and protecting brand health despite ongoing challenges in various markets [22][23] Other Important Information - The company incurred a $230 million charge due to employee-related severance costs, primarily in supply chain and technology [24][25] - The company is working to variabilize its cost structure to improve long-term profitability [25] Q&A Session Summary Question: EMEA performance issues and strategy to fix it - Management highlighted both progress and challenges in EMEA, with running showing double-digit growth but sportswear underperforming [42][43] - New leadership is in place to focus on performance categories and improve marketplace execution [45] Question: Guidance on revenue and earnings - Management provided clarity on expected revenue trends, indicating low single-digit declines overall, with North America improving and Greater China facing headwinds [47][53] Question: D2C gross margins and operating overhead - Management emphasized the importance of a balanced marketplace and noted improvements in the quality of the D2C business in North America [57][60] - The $230 million severance charge was clarified as part of the operating overhead for the quarter [56] Question: Stabilizing the sportswear business - Management is transitioning from defense to offense in sportswear, with some positive signs in classic franchises [68][70] Question: Internal vs external challenges in the turnaround - Management indicated that both internal restructuring and external market conditions are contributing to the slower-than-expected turnaround [74][78]

Financial Data and Key Metrics Changes - For the full year 2025, the company delivered net sales and comparable store sales growth of 1%, marking the first year of positive comparable store sales growth since 2020 [16] - Adjusted EBITDA for the year was $27.5 million, modestly below the prior year but exceeding revised expectations [16] - Net loss for Q4 was $21.7 million, or $0.56 per diluted share, compared to a net loss of $8.7 million, or $0.23 per diluted share in the prior year [20] - Adjusted net loss for Q4 was $3.9 million or -$0.10 per diluted share, compared with adjusted net income of $1.6 million or $0.04 per diluted share in Q4 of the prior year [20] - Gross margin for Q4 was 28.4% compared to 30.4% last year, primarily driven by category mix and increased promotional activity [19] Business Line Data and Key Metrics Changes - Fishing remained the strongest growth driver in 2025, increasing 10.3% for the year and nearly 18% on a two-year stack basis [17] - Hunting and shooting sports increased 4.4% for the year, driven by improved in-stock levels in core firearms and ammunition [17] - Quarterly performance for fishing increased 3.2%, but was impacted by unseasonably warm weather affecting ice fishing sales [19] - Excluding ice fishing, sales in the fishing category were up over 11%, indicating underlying strength [19] Market Data and Key Metrics Changes - The U.S. consumer remains under pressure due to rising fuel costs and broader macro dynamics affecting discretionary spending [14] - The company noted that external events have influenced demand positively, particularly in personal protection categories [14] Company Strategy and Development Direction - The company is focused on three strategic initiatives for 2026: upgrading the loyalty rewards program, developing firearm solution bundling, and reinventing the omni-channel fishing experience [11][12][13] - The strategy aims to strengthen leadership in core pursuits such as fishing, hunting, shooting sports, and personal protection [10] - The company is committed to disciplined inventory management and improving productivity while executing against strategic priorities [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the positioning and traction of strategic initiatives, despite acknowledging ongoing pressures on the U.S. consumer [15] - The company anticipates potential tailwinds from events like America's 250th anniversary, which aligns well with customer interests [14] - Management remains realistic about the duration of current demand trends and external factors influencing consumer behavior [14] Other Important Information - The company ended 2025 with net debt of $90 million, a reduction of 6.1% versus the prior year, and total liquidity of $107.8 million [17] - Capital expenditures for the full year were approximately $19.5 million, primarily focused on store maintenance and technology investments [21] - The company plans to close approximately five underperforming stores in the next 12 months, with no material impact expected on this year's results [22] Q&A Session Summary Question: Near term demand trends and category strength - Management noted strong growth in firearms and ammunition, with trends from January continuing through March, indicating positive comping in Q1 [25][26] Question: Building blocks for EBITDA improvement - Management expects slight improvements in EBITDA driven by category strength in fishing and disciplined cost control, despite some margin pressure from category mix [27][29] Question: Inventory balance and efficiency opportunities - Management highlighted ongoing efforts to improve inventory efficiency and timing, with expectations for lower average inventory levels throughout 2026 [31][32] Question: Risks from external events and consumer headwinds - Management acknowledged risks related to the health of the U.S. consumer, particularly from fuel prices and external events, while also noting potential positive influences from upcoming anniversaries and legislation [39][40] Question: Gross profit margin headwinds in Q4 - Management indicated that gross profit margin pressure was due to a combination of category mix and promotional intensity, particularly in the fishing category [49][50] Question: Store closures and performance - Management discussed the rationale behind closing underperforming stores, emphasizing the need to optimize the store fleet and improve overall productivity [59][60]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $530 million, with a net loss of $40 million or $1.15 per diluted share, and an adjusted net loss of $12 million or $0.35 per diluted share [23][29] - Adjusted EBITDA for the quarter was $111 million, resulting in an adjusted EBITDA margin of 21% [23][24] - Comparable store sales decreased by 3.3% year-over-year in Q4 2025, but would have decreased only 1.5% excluding the impact of a winter storm [21][24] Business Line Data and Key Metrics Changes - Food and beverage same-store sales increased approximately 7% during Q4 2025, with traffic in dining rooms up significantly year-over-year [11][21] - Special events also grew nearly 7% during the same period [21] - The percentage of guests opting for the eat and play combo improved from roughly 10% in Q1 2025 to approximately 16% in Q4 2025 [12] Market Data and Key Metrics Changes - The company experienced roughly flat total company same-store sales at the start of FY 2026, with continued momentum in revenue and adjusted EBITDA growth [5][22] - The company anticipates a significant opportunity during the FIFA World Cup to drive incremental traffic [10][14] Company Strategy and Development Direction - The company is focused on a "back to basics" strategy, emphasizing improvements in marketing, food and beverage offerings, and new game introductions [5][7][18] - Plans for FY 2026 include generating over $100 million in free cash flow and opening 11 new stores, with a focus on strict capital expenditure discipline [19][28][29] - The company aims to enhance guest experiences through improved operational training and a revamped remodel program [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to grow same-store sales, revenue, and adjusted EBITDA in FY 2026, despite external macroeconomic uncertainties [8][62] - The management team believes that the introduction of new games and culturally relevant promotions will attract more guests and drive traffic [42][62] Other Important Information - The company plans to spend no more than $200 million in capital expenditures during FY 2026 [19][28] - The company has a strong liquidity position with $483 million in total liquidity, including cash and available credit [27] Q&A Session Summary Question: Consumer behavior changes due to macroeconomic factors - Management acknowledged the difficulty in parsing the impact of macroeconomic factors on consumer behavior, especially with the spring break shift [32] Question: Impact of value promotions on margins - Management indicated that value promotions have not led to margin erosion, as increased guest spending on food and beverage has offset any potential losses [34][36] Question: Amusement business performance and future initiatives - Management recognized past mistakes in not investing in new games and expressed confidence that upcoming game launches will drive traffic and sales growth [42][44] Question: Marketing strategy changes for 2026 - The marketing strategy will focus on product relevance and data-driven targeting to reach the right audience effectively [46][48] Question: Free cash flow guidance and margin expectations - Management did not provide specific EBITDA guidance but emphasized that growing same-store sales will drive margin growth [53][54] Question: Strategic rationale for continued store growth - Management stated that new store openings are based on strong returns and competitive positioning, while ensuring that core business performance is not compromised [86][90]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue was $49.7 million, down from $54.6 million in Q4 2024, a decrease of $4.9 million [15] - Same-store sales dropped by 11.6% in Q4 2025, with a full-year revenue increase to $212.5 million from $208.4 million in 2024, a 2% rise [15][21] - Adjusted net loss for Q4 2025 was $5 million or $0.09 per diluted share, compared to adjusted net income of $1.4 million or $0.04 per share in Q4 2024 [21] - Restaurant level adjusted EBITDA for Q4 2025 was $3.9 million or 7.9% of total revenue, down from $9.3 million or 17% in Q4 2024 [22] Business Line Data and Key Metrics Changes - The company opened 15 new restaurants in 2025, including 6 in South Korea, bringing the total to 57 [6] - A joint venture with Chubby Cattle International was established for 5 non-performing restaurants, with a $4.5 million write-down expected [6][7] - The company is focusing on operational initiatives to improve financial results, including menu adjustments and new product testing [7] Market Data and Key Metrics Changes - The company reported a significant increase in gift card sales, with approximately $29 million sold to Costco in 2025, a 150% increase from the previous year [8] - The CPG (Consumer Packaged Goods) business has expanded to over 800 locations, with plans to reach 1,500-2,000 locations by the end of 2026 [12] Company Strategy and Development Direction - The company is shifting focus from restaurant openings to enhancing operations and margins at existing locations, while also expanding its grocery store initiatives [25] - The CPG business is expected to be a meaningful growth driver, with projected annual revenue run rate exceeding $100 million within three years [12][13] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging environment due to immigration enforcement affecting customer traffic and rising fuel prices impacting discretionary spending [5] - The company anticipates targeting full-year revenues of $215 million to $225 million in 2026, with adjusted EBITDA margins in the 15%-15.5% range [26] Other Important Information - The company has approximately $2.8 million in cash and cash equivalents and a $20 million revolving credit facility available [24] - Lease liabilities amount to $173 million, offset by $146 million in operating lease assets [25] Q&A Session Questions and Answers Question: Can you provide more details on the revenue guidance for 2026? - The company aims for a $20 million run rate in retail by the end of 2026, with restaurant revenues projected around $205 million [30] Question: What are the expectations for new store openings? - The company has five new stores under construction and may open one or two more by the end of 2026 [32] Question: What is the anticipated profitability in the retail business? - The company expects to leverage existing restaurant infrastructure, minimizing upfront investments, with inventory being the primary capital requirement [35]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $530 million, with a net loss of $40 million or $1.15 per diluted share, and an adjusted net loss of $12 million or $0.35 per diluted share [23] - Adjusted EBITDA was $111 million, resulting in an adjusted EBITDA margin of 21% [23] - Comparable store sales decreased by 3.3% year-over-year in Q4 2025, but would have decreased only 1.5% excluding the impact of extreme winter weather [21][23] Business Line Data and Key Metrics Changes - Food and beverage same-store sales increased approximately 7% during Q4 2025, with positive trends continuing into 2026 [21][11] - Special events also grew nearly 7% [21] - The percentage of guests opting for the eat and play combo improved significantly, indicating a successful strategy in enhancing guest experience [12] Market Data and Key Metrics Changes - The company experienced a shift in consumer behavior due to macroeconomic factors, including gas prices and consumer sentiment, making it challenging to assess the impact on sales [33] - The company is optimistic about leveraging upcoming events like the FIFA World Cup to drive traffic and sales [10][63] Company Strategy and Development Direction - The company is focused on a "back to basics" strategy, emphasizing improvements in marketing, food and beverage offerings, and new game introductions to enhance guest experience and drive traffic [5][7][18] - Plans for FY 2026 include opening 11 new stores and continuing a disciplined approach to capital expenditures, with a target of generating over $100 million in free cash flow [19][30] - The introduction of at least 10 new games and attractions is expected to attract more guests and improve same-store sales [13][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to grow same-store sales, revenue, and adjusted EBITDA in FY 2026, despite challenges from external factors [30][62] - The company is committed to optimizing its marketing strategy and leveraging data to improve guest engagement and traffic [9][48] Other Important Information - The company has made significant progress in its remodel program, with remodeled stores outperforming non-remodeled stores by approximately 700 basis points [17] - The management team has been strengthened, focusing on operational excellence and guest experience to drive sales [7][16] Q&A Session Summary Question: Insights on consumer behavior and sales expectations - Management noted the difficulty in parsing the impact of macroeconomic factors and holiday shifts on sales, indicating a need to wait for clearer data post-spring break [33] Question: Impact of value promotions on margins - Management confirmed that value promotions have not led to margin erosion, as increased guest engagement has resulted in higher food and beverage sales [35][37] Question: Amusement business performance and future initiatives - Management acknowledged past mistakes in not investing in new games and expressed confidence that upcoming game launches will drive traffic and sales growth [43][46] Question: Free cash flow guidance and margin expectations - Management did not provide specific EBITDA guidance but emphasized that growing same-store sales will drive margin improvement [54] Question: Strategic rationale for continued store growth - Management highlighted the importance of maintaining competitive advantage through new store openings while ensuring that capital allocation does not detract from core business performance [88][92]

Financial Data and Key Metrics Changes - In 2025, the company achieved revenue growth of 8% and two-year growth of 15%, significantly outpacing furniture industry peers by 8-30 percentage points [3] - Adjusted EBITDA reached $597 million, or 17.3% of revenues, compared to $539 million, or 16.9% of revenues in 2024 [3] - Free cash flow improved to $252 million from negative free cash flow of $214 million in 2024, marking an increase of $466 million year-over-year [3] Business Line Data and Key Metrics Changes - The company is launching RH Estates, a new brand extension aimed at the traditional market, which is currently under-penetrated [5][6] - RH Estates will feature customizable collections and high-quality upholstery, targeting the luxury customer segment [6][7] Market Data and Key Metrics Changes - 60% of luxury homes feature classic or traditional architecture, influencing furniture purchasing behavior [6] - The company anticipates significant growth in the luxury home furnishings market due to increased spending by high and ultra-high net worth consumers [18] Company Strategy and Development Direction - The company aims to position RH as the arbiter of taste for the home, focusing on scaling taste and building a globally admired brand [4][5] - The strategy includes creating immersive retail experiences that blend residential and retail spaces, enhancing customer engagement [9][10] - The company plans to expand its presence in 27 existing markets and open new design concepts in 48 new markets across North America, representing a $2 billion opportunity [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledges current market challenges but believes the company is well-positioned to thrive in the long term [2][19] - The company expects revenue growth to accelerate to 10%-12% in 2027, reaching $5.4 billion-$5.8 billion by 2030, with adjusted EBITDA margins improving to 25%-28% by 2030 [16] Other Important Information - The company is developing new gallery concepts, including RH Design Compounds and design ecosystems, to enhance capital efficiency and speed of expansion [12][13] - Management emphasizes the importance of long-term investment strategies during transitional periods in the market [24][76] Q&A Session Summary Question: Demand signals from the consumer and margin pressures - Management indicated that margin pressures are related to investment cadence and expansion efforts rather than demand [22] Question: Executive leadership changes and their implications - The rejoining of Dave Stanchak is seen as a strategic move to enhance real estate operations and support European expansion [25][26] Question: Update on RH Paris and international strategy - The opening of key cities like Paris, Milan, and London is crucial for brand positioning and awareness in Europe [35][36] Question: Asset sales and their timing - Management plans to monetize approximately $500 million in real estate assets over the next two years, focusing on sale-leaseback properties [45][46] Question: Scaling the RH Estates collection - The initial product rollout will occur in 30-40 galleries, with a significant inventory buy based on market trends [55] Question: Margin recovery and investment cycle - Management noted that current margin pressures are due to peak investment cycles and economic conditions, but expects improvements post-investment [60][76]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $530 million, with a net loss of $40 million or $1.15 per diluted share, and an adjusted net loss of $12 million or $0.35 per diluted share [24] - Adjusted EBITDA for the quarter was $111 million, resulting in an adjusted EBITDA margin of 21% [24] - Comparable store sales decreased by 3.3% year-over-year in Q4 2025, but would have decreased only 1.5% excluding the impact of extreme winter weather [21][24] - The company expects to generate more than $100 million in free cash flow during FY 2026 [19][30] Business Line Data and Key Metrics Changes - Food and beverage (F&B) same-store sales increased approximately 7% during Q4 2025, with positive trends continuing into 2026 [10][21] - Special events revenue grew nearly 7% in Q4 2025 [21] - The percentage of guests opting for the eat and play combo improved significantly, growing from roughly 10% in Q1 2025 to approximately 16% in Q4 2025 [11] Market Data and Key Metrics Changes - The company has opened two new domestic stores in Q4 2025, bringing the total for the year to 11 new stores [27] - Internationally, the company opened its fourth franchise location in the Dominican Republic and plans to open three more in Delhi, India, Perth, Australia, and Mexico City, Mexico [27][28] Company Strategy and Development Direction - The company is focused on a "back to basics" strategy, emphasizing improvements in marketing, food and beverage offerings, and new game introductions [4][5][18] - Plans for FY 2026 include launching at least 10 new games and attractions, with a focus on culturally relevant IPs to drive traffic [12][13] - The company aims to maintain strict capital expenditure discipline, planning to spend no more than $200 million in CapEx during 2026 [19][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to grow same-store sales, revenue, and adjusted EBITDA in FY 2026, despite external macroeconomic pressures [6][62] - The company is optimistic about leveraging upcoming events like the FIFA World Cup to drive traffic and sales [9][64] - Management acknowledged the challenges posed by consumer sentiment and macroeconomic factors but emphasized a focus on internal strategies to drive growth [33][62] Other Important Information - The company has made significant progress in strengthening its leadership team and improving operational execution to enhance guest experience [15][16] - The remodel program is expected to generate attractive returns, with remodel stores outperforming non-remodel stores by approximately 700 basis points [17][21] Q&A Session Summary Question: Insights on consumer behavior and impact of macro factors - Management noted the difficulty in parsing the impact of macroeconomic factors versus holiday shifts, indicating a need to wait for clearer data post-spring break [33] Question: Impact of value promotions on margins - Management confirmed that value promotions have not led to margin erosion, as increased guest engagement has resulted in higher food and beverage sales [35][36] Question: Amusement business performance and future initiatives - Management acknowledged past mistakes in not investing in amusements and expressed confidence that new game introductions will drive traffic and sales growth [43][45] Question: Marketing strategy changes for 2026 - The marketing strategy will focus on product quality, customer insights, and a balanced media mix to effectively reach target audiences [48][49] Question: Free cash flow guidance and margin expectations - Management did not provide specific EBITDA guidance but emphasized that growing same-store sales will drive margin growth [54][55] Question: Strategic rationale for continued store growth - Management highlighted the importance of maintaining competitive advantage and ensuring high returns on new store investments while being mindful of same-store sales growth [88][92]