Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $10.5 million, a 9% increase from $9.6 million in Q3 2024, marking the fifth consecutive quarter of year-over-year growth [5][10] - Gross profit for Q3 2025 was $3.2 million, compared to $0.1 million in Q3 2024, with a gross margin of 30.7%, up from 0.9% in the prior year [12] - Net loss for Q3 2025 was $4.3 million or negative $0.08 per diluted share, an improvement from a net loss of $7.6 million or negative $0.15 per diluted share in Q3 2024 [13] Business Line Data and Key Metrics Changes - Lab Essentials revenue was $8.3 million in Q3 2025, a 16% increase from $7.2 million in Q3 2024, driven by higher average revenue per customer [10][11] - Clinical Solutions revenue was $1.7 million in Q3 2025, a 13% decrease from $2.0 million in Q3 2024, attributed to lower average revenue per customer [11] Market Data and Key Metrics Changes - Approximately 25% of total revenue is derived from custom products purchased by biopharma customers, with the remaining 75% growing in the low double digits [8][16] - The company has seen a steady increase in demand for custom reagents in market segments such as animal health, life science tools, and diagnostics [8] Company Strategy and Development Direction - The company is focused on long-term, sustainable growth, aiming for $200 million in annualized revenue without significant additional capital investments [6] - Investments in distributor management, purchasing integration, and price optimization are expected to drive operational efficiency and revenue growth [6][9] - The company is pursuing potential tuck-in acquisitions and collaborations to enhance capabilities and accelerate growth [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook for end markets, despite current softness in demand for clinical solutions from biopharma customers [19] - The company expects modest growth in custom biopharma products and low double-digit growth in the remaining revenue segments [16][18] Other Important Information - The company reiterated its 2025 total revenue guidance of $39 million to $42 million, expecting to finish slightly below the midpoint of that range [15] - Capital expenditures for Q3 2025 were $0.4 million, with free cash outflow remaining at $2.4 million, consistent with Q3 2024 [15] Q&A Session Summary Question: How have customer conversations trended regarding MFN Pharma Tariffs? - Management noted optimism but indicated that actual purchasing actions have not yet been observed, with limited conversations about ramping up spending [21][22] Question: Update on the RUO Plus initiative? - The initiative is performing well, providing flexibility for customers not ready for GMP, and is seen as a pathway to migrate them to GMP in the future [24] Question: Expected product mix and interest in custom portfolio? - Management highlighted that 75% of the business is growing double digits, with increased interest in tools and diagnostics, indicating a strong performance across all market segments [29][30] Question: Insights on clinical solutions customer acquisition? - Management confirmed ongoing customer acquisition, with a focus on larger-sized customers, and noted that the mix may change but remains positive [36][38] Question: Gross margin improvement trajectory? - Management indicated that gross margin improvements are expected to continue, driven by high fixed costs and ongoing efficiency projects [42][44] Question: Areas for driving more efficiencies? - The company is continuously seeking operational efficiencies across various functions, including labor savings and IT infrastructure improvements [48][50]

Financial Data and Key Metrics Changes - JFrog's total revenue for Q3 2025 was $136.9 million, representing a 26% year-over-year increase [5][20][27] - Operating margin improved to 18.7%, up from 13.5% in Q3 2024 [24] - Cloud revenue reached $63.4 million, marking a 50% year-over-year growth and accounting for 46% of total revenues [22][27] - Gross profit was $114.9 million, with a gross margin of 83.9%, compared to 82.8% in the previous year [23][24] - Net dollar retention was 118%, consistent with the prior quarter, indicating strong customer growth [7][23] Business Line Data and Key Metrics Changes - Cloud revenue growth was driven by increased usage of software packages and artifacts, including PyPI, Docker containers, and NPM [6][10] - Self-managed or on-prem revenues were $73.5 million, up 10% year-over-year [22] - The number of customers spending over $1 million annually grew to 71, a 54% increase from the previous year [6][23] Market Data and Key Metrics Changes - JFrog's enterprise focus led to significant wins across various verticals and geographies, including a $9 million deal with the UK Customs and Revenue Agency [11][12] - The company noted a rise in software supply chain attacks, emphasizing the need for robust security solutions [12][13] Company Strategy and Development Direction - JFrog aims to be the universal binary repository and model registry for software supply chains, focusing on AI and machine learning developments [8][15] - The company is committed to integrating security solutions into its platform, addressing the growing demand for software supply chain security [12][41] - JFrog introduced new products like JFrog Uptrust to enhance governance and compliance in software delivery [17][60] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future growth, particularly in cloud adoption and security solutions [26][30] - The company is monitoring AI-driven usage closely, believing it is still early to predict significant cloud usage growth [10][46] - JFrog's guidance for 2025 suggests sustained contributions from security products and customer commitments, with a projected revenue range of $523 million to $525 million [27][26] Other Important Information - JFrog completed payments of $5.7 million related to the acquisition of Qwak [25] - The company ended Q3 2025 with $651.1 million in cash and short-term investments, up from $522 million at the end of 2024 [25] Q&A Session Summary Question: Was there anything one-time in the cloud revenue results? - Management confirmed that the strong cloud revenues were not one-time but a result of strong usage across multiple package types and security solutions [31][32] Question: What has changed in the go-to-market execution for cloud growth? - Management highlighted consistent execution and a strategy of converting customers with overusage to higher commitments, leading to stable cloud growth [33] Question: Can you elaborate on the types of artifacts managed by Artifactory? - Management noted a growth in AI-related artifacts, including those from Hugging Face and various programming languages, indicating a trend towards using JFrog as a system of record for all packages [34][35] Question: How relevant is the UI/UX change due to AI for JFrog? - Management emphasized that JFrog Fly is designed to accommodate both developers and AI agents, reimagining the software supply chain [36][37] Question: What is the sustainability of new budgets allocated towards security? - Management indicated that there is an increasing focus on security budgets, especially in light of recent software supply chain attacks [50][52] Question: How is the pipeline for security tracking for Q4 and beyond? - Management reported a growing pipeline for security solutions, although sales cycles are longer due to the need for customers to upgrade from existing solutions [57][58]

Financial Data and Key Metrics Changes - AEye reported a GAAP net loss of $9.3 million, or $0.30 per share, in Q3 2025, which was comparable to the GAAP net loss of $9.3 million, or $0.48 per share, in Q2 2025 [18] - Non-GAAP net loss improved to $5.4 million, or $0.17 per share, beating consensus estimates, compared to a non-GAAP net loss of $6.7 million, or $0.35 per share, in the prior quarter [18] - Cash balance at the end of Q3 was $84.3 million, more than quadrupling compared to the prior quarter-end [18][19] Business Line Data and Key Metrics Changes - The customer base doubled to 12 contracts signed year-to-date, with significant traction in both automotive and non-automotive sectors [6][27] - The commercial pipeline expanded significantly, with active quotes tripling and technical engagements increasing by nearly 50% [15][27] Market Data and Key Metrics Changes - Engagement with the automotive industry remains strong, with active discussions with about two-thirds of major Western OEMs [9] - The non-automotive funnel grew sixfold from fewer than 100 prospects earlier this year to nearly 600 today [15] Company Strategy and Development Direction - AEye is focused on building and converting a strong revenue pipeline, with a capital-light model that allows for efficient scaling without heavy capital investments [5][17] - The company is executing a three-phase growth strategy aimed at unlocking value and building momentum, with the expectation of accelerating revenue growth in the coming years [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the capital-light model, emphasizing its flexibility and resilience in manufacturing [24] - The company anticipates a significant shift towards Level 3 and Level 4 automotive applications based on recent OEM requirements [38] Other Important Information - AEye has secured a partnership with Lite-On to expand manufacturing capacity, aiming to produce up to 60,000 units annually [8] - The company has cleaned up its capital and debt structure, positioning itself in a stronger financial state compared to peers [19] Q&A Session Summary Question: Confidence in the capital-light model - Management highlighted the importance of partnerships for manufacturing flexibility and cost efficiency, allowing for just-in-time delivery and lower upfront costs [24][25] Question: Customer pipeline and mix between auto and non-auto - The customer base has shown significant growth, with a unique value proposition resonating in high-performance sectors like defense and smart infrastructure [27][30] Question: Interest from commercial drone manufacturers - Management confirmed active engagement across UAV and manned aerial vehicles, with a focus on high-performance solutions applicable to various use cases [36][37] Question: Focus of OEMs for mass market - There has been a noticeable shift in OEM requirements towards Level 3 and Level 4 specifications in the last six months [38] Question: Details on institutional investor and investment size - Management indicated that a well-known institutional investor has contributed to the recent capital raise, enhancing the company's financial runway [44][45] Question: Applications and volume opportunity from new wins - New contracts are primarily in high-performance sectors, with proof-of-concept deployments laying the groundwork for future volume ramp [49][50]

Financial Data and Key Metrics Changes - Net revenues increased by 8% year-over-year to $151.7 million, exceeding the outlook of flat to up 2% [22][24] - Adjusted EBITDA margin improved by 900 basis points to 12.4% compared to 3.4% last year [5][29] - Gross margin expanded by 280 basis points to 69.9%, driven by lower discounts and improved return rates [27][29] Business Line Data and Key Metrics Changes - Scrubwear grew by 8%, representing 84% of net revenues, supported by effective merchandising and marketing [24][25] - Non-scrubwear increased by 7%, accounting for 16% of net revenues, with strong growth in underscrubs and shoes [24][25] - Average order value rose by 6% to $114, primarily due to a higher rate of full-price sales [23] Market Data and Key Metrics Changes - U.S. sales increased by 8% to $127.3 million, marking the strongest performance in nine quarters [25] - International net revenues grew by 12%, with notable strength in acquiring new customers [25][26] - Active customer count reached nearly 2.8 million, reflecting a 4% increase year-over-year [23] Company Strategy and Development Direction - The company is focusing on expanding its international presence, planning to increase from 33 to nearly 60 markets by year-end [15][17] - Investments are being made in product innovation, including new fabric solutions like FIBREX, aimed at enhancing product offerings [8][58] - The company is committed to maintaining a strong connection with healthcare professionals, emphasizing community engagement and brand authenticity [21][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing momentum into Q4, expecting it to be the strongest net revenue growth quarter of the year [5][31] - The company anticipates a full-year revenue growth of approximately 7%, up from previous low single-digit expectations [31] - Management acknowledged challenges from tariffs but highlighted successful mitigation strategies and operational efficiencies [36][37] Other Important Information - Inventory increased by 23% year-over-year to $151.2 million, attributed to deeper investments in key styles and earlier timing of in-transit inventory [29][30] - The company has $52 million available for future share repurchases under its current program [30] Q&A Session Summary Question: Can you discuss the gross margin performance this quarter? - Management noted a gross margin of 69.9%, higher than historical rates, driven by improved discount rates and returns processing [39][40] Question: What drove the demand during business-as-usual days without promotions? - Management reported acceleration in business-as-usual days, with broad-based performance across U.S. and international markets [41][42] Question: How do you see AOV contributing to revenue growth in 2026? - AOV increased by 6%, with expectations for continued growth driven by product mix and customer engagement [44][45] Question: What are the growth drivers for community hubs? - The company plans to open three new community hubs in key healthcare locations, leveraging learnings from existing stores [51][52] Question: How is the international market expected to grow? - Management expressed confidence in sustaining double-digit growth in international markets, supported by a two-pronged strategy of broad and deep market penetration [61][62]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported record net revenue of $376 million, a 4% increase year over year, exceeding the high end of the outlook range by $6 million [11] - Net income rose by 2% year over year to $39 million, representing a net income margin of 10% [11] - Adjusted EBITDA decreased by 3% year over year to $98 million, with an adjusted EBITDA margin of 26%, which was $13 million above the high end of the outlook range [11][12] - Services revenue reached a quarterly record of $244 million, up 7% year over year, while RRNO revenue declined by 2% year over year to $114 million [11][12] Business Line Data and Key Metrics Changes - Services revenue increased by 7% year over year, contributing significantly to overall business performance [5][11] - RRNO revenue experienced a decline of 2% year over year, attributed to a decrease in RRNO locations, which offset growth in services locations [11] - The number of paying advertising locations decreased by 2% year over year to 512,000, with ad clicks declining by 11% year over year [11][12] Market Data and Key Metrics Changes - The operating environment for businesses in the restaurant and retail sectors remained challenging, impacting overall revenue [6] - The company noted a cautious approach among advertisers in their spending as they entered the fourth quarter, particularly in the RRNO segment [19] Company Strategy and Development Direction - The company is focusing on leveraging AI to enhance user experience and business operations, rolling out over 35 new features and updates [5] - The partnership with DoorDash is expected to expand the food ordering network significantly, adding approximately 200,000 new restaurants [9] - The introduction of new AI-driven subscription products, such as Yelp Host and Yelp Receptionist, aims to provide smarter answering services for businesses [9][31] Management's Comments on Operating Environment and Future Outlook - Management highlighted ongoing macroeconomic uncertainties affecting revenue, leading to a lowered full-year revenue outlook [14] - The company anticipates a decrease in net revenue in Q4 compared to Q3, reflecting continued macro pressures [14] - Management remains optimistic about the long-term potential of AI and its ability to transform the business [33] Other Important Information - The company repurchased $75 million worth of shares in Q3 2025, with $127 million remaining under the existing repurchase authorization [13] - The company aims to reduce stock-based compensation as a percentage of revenue to less than 8% by the end of 2025 [12] Q&A Session Summary Question: What is the current macro environment impact on the services segment? - Management noted that macro pressures have persisted, particularly affecting the RRNO segment, while services continue to see consistent demand [19] Question: Can you provide insights on the demand for data licensing products? - Management expressed excitement about the growth in data licensing, emphasizing the value of Yelp's trusted content for AI search platforms [22] Question: How will the DoorDash partnership affect revenue? - The partnership is expected to generate incremental revenue by expanding restaurant coverage and enhancing consumer experience on the Yelp platform [26] Question: What is the scale of the opportunity for Yelp Host and Yelp Receptionist? - Management indicated a large total addressable market (TAM) for these products, with positive early feedback from users [38] Question: What factors are driving the increase in average pricing on the platform? - The increase in average pricing is attributed to a dynamic auction system that optimizes ad budget deployment, resulting in higher cost per click due to fewer clicks overall [40][42]

Financial Data and Key Metrics Changes - In Q3 2025, the company generated revenue of $45.9 million and adjusted EBITDA of $5.8 million, both exceeding guidance and marking the second consecutive quarter of sequential growth in these metrics [3][16] - Non-GAAP gross margin was reported at 41.8%, reflecting a favorable product mix and strength in FWA [18] - Adjusted EBITDA margin was 12.5%, the third highest in over a decade [18] Business Line Data and Key Metrics Changes - FWA revenue was the second highest in company history, surpassing mobile hotspot revenue for the third time [16] - FWA shipment volumes increased by over 50% year-over-year, indicating strong enterprise adoption [5] - Mobile revenue is expected to grow sequentially in Q4 2025 due to expanded customer contributions and product launches [17][20] Market Data and Key Metrics Changes - The company secured a new Tier 1 US carrier win during Q3, expanding its reach in both FWA and mobile hotspots [6] - The introduction of the FX40 200 is expected to broaden market opportunities and enhance the company's position in the enterprise segment [8] Company Strategy and Development Direction - The company is focused on scaling its core FWA and mobile solutions while evolving into a solutions company that integrates hardware, network management, and software [3] - The strategy includes expanding the product portfolio, adding new carriers, and deepening engagement with MSOs, MSPs, and VARs [9] - Leadership has been strengthened with the addition of experienced executives to support growth initiatives [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of FWA, driven by increased carrier deployments and favorable market dynamics [31][43] - The company anticipates continued sequential revenue growth in Q4 2025, despite historical seasonality trends [20][22] - Management highlighted the potential for increased demand for domestic suppliers due to regulatory changes affecting foreign competition [40] Other Important Information - The company has filed a universal shelf to enhance financial flexibility and support growth initiatives [19] - The software services revenue remained stable at approximately $12 million, contributing to high-margin revenue [17] Q&A Session Summary Question: Monetization changes for Subscribe and Connect - Management indicated that Inseego Connect has transitioned to a core part of the enterprise platform, driving usage and value capture [25] Question: Seasonal growth expectations for Q1 - Management acknowledged that Q4 typically has fewer selling days, but they expect to maximize opportunities as they enter 2026 [28] Question: Impact of new carrier contracts on revenue - Management expects significant volume growth from new carrier contracts, particularly in the MiFi market [34] Question: Competitive landscape and market share gains - Management believes they are well-positioned to capitalize on opportunities arising from regulatory changes favoring domestic suppliers [40] Question: Feedback on Inseego Connect API - Positive feedback was received regarding the APIs, which are expected to enhance service revenue attach rates [42]

Financial Data and Key Metrics Changes - EverCommerce reported revenue of $147.5 million for Q3 2025, reflecting a 5.3% year-over-year growth, consistent with previous guidance [5][18] - Adjusted EBITDA for the quarter was $46.5 million, representing a margin of 31.5%, which is an expansion of 140 basis points year-over-year [5][18] - Payments revenue grew by 6% year-over-year, accounting for approximately 21% of overall revenue [10][11] Business Line Data and Key Metrics Changes - Subscription and transaction revenue totaled $142.2 million, with core SaaS revenue growing over 8% in the quarter [18] - Adjusted gross profit was $114 million, yielding a gross profit margin of 77.3%, slightly down from 78.1% in Q3 2024 [18] - The annualized total payments volume (TPV) reached approximately $13 billion, marking a 5.2% year-over-year growth [11] Market Data and Key Metrics Changes - EverCommerce serves over 725,000 customers across three major verticals: EverPro, EverHealth, and Everwell, with the first two accounting for about 95% of consolidated revenue [8] - The company achieved a net revenue retention (NRR) of 97%, with customers using multiple solutions showing an NRR of over 100% [10] Company Strategy and Development Direction - The strategic acquisition of Zyratok, an AI agentic platform, aims to enhance AI capabilities within the service-based industries, particularly in home and field services [6][12] - The company is focusing on providing AI-powered vertical software to maximize long-term growth and shareholder value [6][8] - EverCommerce plans to continue its transformation and optimization programs to improve customer satisfaction and operational efficiency [19][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the core SaaS business despite some macroeconomic headwinds affecting the rebate program [28][35] - The company has narrowed its revenue and adjusted EBITDA guidance for 2025, expecting total revenue of $584 to $592 million and adjusted EBITDA of $174.5 to $179.5 million [22][23] Other Important Information - The company ended the quarter with $107 million in cash and cash equivalents and $155 million of undrawn capacity on its revolver [21] - EverCommerce repurchased approximately 2.6 million shares for $29.1 million at an average price of $11.10 per share [21][22] Q&A Session Summary Question: Can you elaborate on the Zyratok acquisition and its business model? - Management indicated that Zyratok's product is focused on the home service sector and will be integrated into EverCommerce's systems, enhancing capabilities across the board [25][26] Question: What were the impacts of the rebate program on guidance? - Management noted a small impact from the rebate program due to macroeconomic factors, but emphasized that the core SaaS business remains strong [28][29] Question: What changes to guidance have occurred due to macro trends? - Management confirmed that there were no significant macroeconomic impacts other than those related to the rebate program, maintaining a positive outlook for the core SaaS business [35][36] Question: How is the pricing for Zyratok structured? - The pricing model for Zyratok includes both subscription and usage-based components, with plans to integrate these into EverCommerce's broader SaaS offerings [39][40] Question: How is the spending optimization program progressing? - Management reported successful cost reductions exceeding $10 million in 2025, with ongoing efforts to enhance operational efficiency and margin expansion [46][47]

Financial Data and Key Metrics Changes - In Q3 2025, NdPr oxide production reached 721 metric tons, a 21% sequential increase and a 51% year-over-year increase, marking a record production level [4] - Adjusted EBITDA remained generally unchanged both year-over-year and sequentially, with the decline in profitable concentrate sales offset by improving per-unit production costs for NdPr [8][9] - Adjusted diluted EPS followed the trend of adjusted EBITDA results, benefiting from higher interest income due to a materially higher cash balance [9] Business Line Data and Key Metrics Changes - In the materials segment, REO production was strong at 13,254 metric tons, slightly down from the record-setting quarter in Q3 of the previous year [9] - Separated product sales volumes saw nearly 20% sequential growth and 30% year-over-year growth, with a lag between production volume growth and sales due to toll processing [10] - The magnetics segment received a $40 million prepayment from Apple for magnet production from recycled materials, with additional prepayments expected as progress continues [6][7] Market Data and Key Metrics Changes - Improved market pricing over the last year positively impacted realized pricing, with expectations for next quarter's realized price to approximate $61 per kilogram [12] - The absence of concentrate revenue in the quarter was mostly offset by the ramp in separated product sales and magnetic precursor product sales [8] Company Strategy and Development Direction - The company is focused on vertical integration and aims to restore America's ability to produce magnet-grade heavies at scale, with a new heavy circuit expected to start commissioning in mid-2026 [5][26] - The partnership with the Department of Defense provides earnings visibility and a transformed economic foundation to accelerate magnetics production [5][14] - The company is actively exploring multiple strategies to optimize costs and scale metal production, including recycling capabilities [24][35] Management's Comments on Operating Environment and Future Outlook - Management highlighted the necessity for self-sufficiency and resilience in the rare earth supply chain, emphasizing the strategic importance of controlling critical materials [27][28] - The company expects to return to profitability in Q4 2025 and anticipates strong growth resuming in Q1 2026 [5][22] - Management expressed confidence in the long-term growth potential driven by firm contracts and upcoming initiatives, including recycling and appreciating NdPr prices [14][35] Other Important Information - Capital expenditures through Q3 totaled approximately $110 million, with expectations for full-year gross CapEx to be closer to the low end of the initial $150-$175 million range [20] - The company is on track to produce samarium oxide by 2028, with potential for producing other heavy rare earths based on demand [42] Q&A Session Summary Question: How long could the SEG Plus stockpile support heavy production once fully ramped? - The company has several hundred tons of SEG stockpiled and is confident in its inventory to support commissioning the circuit [37][38] Question: How is customer engagement going beyond Apple and GM? - There is significant engagement across various verticals consuming magnets, with a focus on executing for foundational customers [39] Question: What is the timeline for producing other rare earth metals of interest to the DOD? - The company has committed to producing samarium oxide by 2028 and is in discussions for other materials based on demand [42] Question: Can you clarify the $200 million prepayment from Apple? - The first $40 million prepayment was received, with expectations for additional payments as operational milestones are met [44] Question: What are the key risks for MP with incentive prices now? - The focus is on ramping production smartly to serve the market while leveraging the value of the concentrate stockpile [45][46] Question: How do you prioritize recycling versus third-party feedstocks? - The company is taking an all-of-the-above approach, focusing on scaling operations while being opportunistic about feedstock acquisition [47][49]

Financial Data and Key Metrics Changes - Net sales for Q2 2026 were $1.14 billion, reflecting a 6% sequential growth and exceeding the midpoint of guidance by $10.4 million [12][13] - Non-GAAP gross margin increased to 56.7%, impacted by inventory reserve charges of $71.8 million and underutilization charges of $51 million [12][13][22] - Non-GAAP operating margin rose to 24.3% of sales, with operating expenses at 32.4% of sales [13][22] - Non-GAAP net income was $199.1 million, translating to earnings per diluted share of $0.35, which was $0.02 above guidance [13][22] Business Line Data and Key Metrics Changes - Microcontroller (MCU) business grew 9.7% sequentially, driven by strong demand for 32-bit MCUs [3][4] - Analog business saw a 1.7% sequential increase [4] - Data center products, particularly Gen 4 and Gen 5, experienced strong sales growth, although from previously depressed levels [3][4] Market Data and Key Metrics Changes - Sales growth was observed in the Americas and Asia, while Europe remained flat, which is considered acceptable for a summer quarter [3] - The data center market showed the strongest performance, with increased bookings and shipments as inventory corrections occurred [18][19] Company Strategy and Development Direction - The company is focusing on advanced technology with the introduction of the industry's first 3-nanometer-based PCIe Gen 6 switch, aimed at enhancing AI infrastructure [4][8] - A strategic shift towards high-performance data center products is underway, with plans to expand offerings in the AI and FPGA markets [70] - The company aims to improve operational efficiency and reduce inventory write-offs and underutilization charges in the upcoming quarters [30][31] Management's Comments on Operating Environment and Future Outlook - Management noted a softer overall business environment compared to previous expectations, but still anticipates better-than-seasonal growth in the upcoming quarters [25][26] - The company expects net sales for the December quarter to be approximately $1.129 billion, down 1% sequentially, with a non-GAAP gross margin guidance of 57.2% to 59.2% [22][23] - Management expressed optimism about strong bookings and a robust backlog for the March quarter, indicating potential for sequential growth [45][46] Other Important Information - Inventory levels decreased by $73.8 million sequentially, with inventory days down to 199 days [14][15] - The company is undergoing a restructuring plan, including the sale of its Fab 2 facility, which is expected to close in December 2025 [5][6] Q&A Session Summary Question: How does the current environment compare to 90 days ago? - Management noted a slightly softer tone in the business environment, impacting guidance for the December quarter, but bookings were strong [25][26] Question: What is the outlook for inventory reserve and underutilization charges? - Management indicated uncertainty in predicting future charges but expects improvements in the upcoming quarters as sales grow [28][29] Question: What is the status of long-term supply agreements (LTSAs)? - Management clarified that they have been flexible with customers regarding LTSAs, allowing them to adjust their requirements without forcing purchases [34][36] Question: What drives confidence in above-seasonal growth for the next three quarters? - Management cited a strong backlog and increased bookings as indicators of potential growth, despite current low lead times [44][46] Question: What is the expected impact of underutilization and inventory write-offs on gross margins? - Management expects these charges to decrease over time, positively impacting gross margins as sales improve [60][62]

Financial Data and Key Metrics Changes - Elutia reported Q3 2025 revenue of $3.3 million, down from $3.6 million in the same quarter last year, but gross margin improved to 55.8% from 49% a year ago [39][40] - Adjusted gross margin, excluding non-cash amortization, was 64% compared to 56% in the prior year [40] - Operating expenses decreased to $7.1 million from $11 million a year ago, resulting in a loss from operations of $5.2 million, down from $9 million [40] Business Line Data and Key Metrics Changes - SimpliDerm revenue increased by 18% from Q2 2025 to $2.4 million, although it was down from the previous year due to various factors [35] - Cardiovascular product sales reached $900,000 in Q3 2025, up 68% year-over-year and 28% sequentially [38] Market Data and Key Metrics Changes - The breast reconstruction market is valued at $1.5 billion, with 162,000 procedures performed annually in the U.S. [11][12] - Post-operative infection rates in breast reconstruction are reported to be between 15%-20%, highlighting a significant unmet medical need [10][11] Company Strategy and Development Direction - Elutia aims to leverage its validated technology platform to address the unmet medical need in breast reconstruction through the development of NXT 41 and NXT 41X products [10][29] - The company plans to utilize its existing commercial infrastructure from SimpliDerm to support the launch of NXT 41 and NXT 41X [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, emphasizing the importance of the recent sale of the bio-envelope business to Boston Scientific for $88 million, which strengthens the balance sheet and operational efficiency [32][33] - The company is focused on resolving legacy litigation issues, with only six cases remaining from an initial 110, indicating a move towards a cleaner operational slate [42] Other Important Information - The company has a robust manufacturing facility in Gaithersburg, Maryland, which is expected to support the production of NXT 41 and NXT 41X without delays [55] - Elutia has resolved seven legacy litigation cases in the quarter, reducing the total to six remaining cases with an estimated liability of $700,000 [42] Q&A Session Summary Question: Insights from Eliupro's development to commercial rollout - Management highlighted the importance of having a strong team and commercial infrastructure in place, which contributed to Eliupro's successful market entry [46][47] Question: Leveraging SimpliDerm for NXT - The existing relationships and commercial presence from SimpliDerm will be utilized to facilitate the adoption of NXT 41X, as both products target the same customer base [49] Question: Clinical evidence and data generation for NXT - While there is no requirement for clinical data for the 510(k) pathway, the company plans to generate strong clinical evidence to support the product's market adoption [51][53] Question: Manufacturing plans for NXT and 41X - The manufacturing of NXT and 41X will occur in a separate GMP facility, ensuring compliance with regulations and readiness for production [54][55] Question: Current run rate and growth sustainability for cardiovascular business - The cardiovascular business is expected to achieve steady growth, with a current run rate of approximately $1 million per quarter, benefiting from high gross margins [57]