Financial Data and Key Metrics Changes - Operating revenue increased by 7.1% year over year, reaching KRW 7.1267 trillion, driven by sustained growth from core businesses including telecom, real estate, cloud, and data center [31] - Operating profit rose by 16% year over year to KRW 538.2 billion, with net income up 16.2% year over year at KRW 445.3 billion [33][31] - EBITDA increased by 5.2% year over year, reaching KRW 1.5039 trillion [33] Business Line Data and Key Metrics Changes - Wireless revenue grew by 4% year over year to KRW 1,809.6 billion, supported by the expansion of the 5G subscriber base, which reached a penetration rate of 80.7% [44][46] - Broadband internet revenue increased by 2.3% year over year to KRW 636.7 billion, driven by GiGA Internet subscriber growth [48] - Media business revenue grew by 3.1% year over year, attributed to higher IPTV subscriber net additions and premium plan sales [50] - B2B service revenue reported a slight growth of 0.7% year over year, despite streamlining low-margin businesses [54] - AI and IT business revenue decreased by 5.7% year over year due to structural enhancements, although there were project wins from large customers [56] - KT cloud revenue surged by 20.3% year over year, driven by increased data center utilization and demand for AI cloud services [60] - KT Estate revenue rose by 23.9% year over year, supported by strong hotel business performance and new development projects [62] Market Data and Key Metrics Changes - The net debt ratio increased by 4.2 percentage points year over year to 34.5% [40] - Total capital expenditures (CapEx) for KT and its main subsidiaries reached KRW 1,963.7 billion, with KT's separate basis CapEx at KRW 1,329.5 billion [42] Company Strategy and Development Direction - KT is focusing on transforming into an AICT (AI, Cloud, and Telecom) company, collaborating with global tech firms to launch specific services and enhance its core portfolio [15][17] - The company is implementing a corporate value enhancement plan, which includes streamlining low-margin businesses and liquidating non-core assets [25] - KT has initiated a comprehensive plan to compensate customers affected by unauthorized micropayments and data breaches, including free USIM replacements [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed a conservative outlook for Q4 due to seasonality and uncertainties related to customer compensation measures following the hacking incident [75] - Despite challenges, management believes that the company can achieve year-over-year growth for the full year 2025, supported by solid performance in Q3 and ongoing efforts to drive top-line growth [78][79] Other Important Information - The third quarter dividend was set at KRW 601 per share, maintaining a 20% higher payout year over year [23] - A share buyback plan amounting to KRW 1 trillion was announced, with KRW 250 billion already executed [27][82] Q&A Session Summary Question: Outlook for Q4 and dividend payment - Management acknowledged the usual seasonality in Q4 and uncertainties due to customer compensation, taking a conservative stance on forecasts while aiming to minimize impacts [75][80] Question: Financial impact of the hacking incident and compensation measures - Management confirmed that compensation costs related to the unauthorized micropayment incident will be recognized in Q4, including USIM replacements and other expenses [91][93] Question: CEO appointment process and its impact on the value-up program - The CEO appointment process involves a director candidate recommendation committee and will not affect the ongoing value-up plan, which is a commitment to the market [100][106]

Financial Data and Key Metrics Changes - The company reported a 10% year-over-year revenue growth, achieving a record quarterly revenue of $333 million and an EPS of $0.99 [2][11] - Net income reached $37 million, representing 11.2% of revenue, with a sequential expansion of 50 basis points [15] - Gross margin for the quarter was 23.2%, reflecting a 70 basis point sequential decline [14] Business Line Data and Key Metrics Changes - Service revenues declined by 2% year-over-year, primarily due to reduced U.S. ocean shipping and drayage revenues [11] - Product revenue grew by 16% year-over-year, driven by a 69% growth in Europe, although U.S. product revenue declined by 5% [12][13] - The marketplace GMV rose approximately 21% year-over-year, reaching nearly $1.5 billion [6] Market Data and Key Metrics Changes - European revenues increased by 70% year-over-year to a record $100 million, marking a significant milestone in global expansion [7] - The active 3P seller base expanded by 17% year-over-year to 1,232, with GMV for this cohort climbing more than 24% [6] Company Strategy and Development Direction - The company views M&A as a cornerstone of its long-term growth strategy, with the recent acquisition of Noble House serving as a validation of this approach [3] - The upcoming acquisition of New Classic Home Furnishings is aimed at diversifying the business and enhancing brick-and-mortar wholesale capabilities [4][9] - The company is focused on creating a channel-agnostic ecosystem that bridges digital and physical sales [4] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic challenges, emphasizing a disciplined execution of their long-term strategy [2][5] - The company is optimistic about future growth opportunities despite current market pressures, focusing on operational efficiency and diversification [5][21] Other Important Information - The company remains debt-free and has a total liquidity of $367 million, allowing for strategic acquisitions and shareholder returns through buybacks [15] - The fourth-quarter revenue guidance is expected to be between $328 million and $344 million [16] Q&A Session Summary Question: Thoughts on additional M&A acquisitions - Management is currently focused on closing the New Classic acquisition but is looking for new opportunities concurrently [19] Question: Impact of recent rate cuts on the housing market - Management remains hopeful about a housing market rebound but emphasizes a focus on execution and diversification to drive growth regardless of macroeconomic conditions [21] Question: Drivers of growth in Q3 - The growth in Q3 was primarily driven by Noble House's strong performance in both the U.S. and Europe [25] Question: Confidence in Q4 growth - Management indicated that Q4 is progressing as expected, with strong performance anticipated from both Noble House and organic business segments [27]

Financial Data and Key Metrics Changes - The company reported a robust 10% year-over-year growth, achieving a quarterly revenue of $333 million and an EPS of $0.99, marking a new record [2][11] - Net income reached $37 million, representing 11.2% of revenue, with a sequential expansion of 50 basis points [15] - Gross margin for the quarter was 23.2%, reflecting a 70 basis point sequential decline from the previous quarter [14] Business Line Data and Key Metrics Changes - Service revenues declined by 2% year-over-year, primarily due to reduced U.S. ocean shipping and drayage revenues [11] - Product revenue grew by 16% year-over-year, driven by a 69% growth in Europe, although U.S. product revenue declined by 5% [12][13] - The marketplace GMV rose approximately 21% year-over-year, reaching nearly $1.5 billion, with active 3P seller base increasing by 17% [6][7] Market Data and Key Metrics Changes - European revenues surged by 70% year-over-year to a record $100 million, highlighting the region as a significant growth engine [7] - The company’s international markets acted as a hedge against domestic softness, contributing to overall revenue growth [6] Company Strategy and Development Direction - The company views M&A as a cornerstone of its long-term growth strategy, with the recent acquisition of Noble House serving as a validation of this approach [3][9] - The upcoming acquisition of New Classic Home Furniture is aimed at diversifying the business and enhancing brick-and-mortar wholesale capabilities [4][10] - The strategy focuses on creating a channel-agnostic ecosystem that bridges digital and physical sales [4] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic challenges through disciplined execution and diversification strategies [5][21] - The company anticipates that the acquisition of New Classic will enhance distribution and channel reach, with expected financial performance improvements over the next four to six quarters [10][15] Other Important Information - The company remains debt-free and has executed approximately $16 million in share buybacks as part of its capital allocation strategy [15][16] - The fourth-quarter revenue guidance is projected to be between $328 million and $344 million [16] Q&A Session Summary Question: Thoughts on additional M&A acquisitions - Management is currently focused on closing the New Classic acquisition but is open to exploring new opportunities thereafter [18][19] Question: Impact of recent rate cuts on home merchandise sales - Management remains hopeful about a housing market rebound but emphasizes a focus on execution and diversification to drive growth regardless of macroeconomic conditions [20][21] Question: Drivers of growth in Q3 - The growth in Q3 was primarily driven by Noble House's strong performance in both the U.S. and Europe [25] Question: Confidence in Q4 performance - Management indicated that Q4 is progressing as expected, with strong performance anticipated from both organic growth and acquired businesses [27]

Financial Data and Key Metrics Changes - Total investment income for Q3 2025 was $36.7 million, up from $35.1 million in Q2 2025, while net investment income increased to $15.7 million from $13.9 million [15][16] - The weighted average portfolio risk rating rose to 2.42 in Q3 2025 from 2.33 in Q2 2025 [15] - The dollar-weighted loan-to-value ratio increased from 29.6% to 31.4% [15] - The total investment portfolio's fair value decreased by 7.7% to $946 million from $1.02 billion [16] - NAV per share decreased by 1.9% to $13.55 from $13.66 [18] Business Line Data and Key Metrics Changes - The company completed 11 investments totaling $128.3 million in Q3 2025, focusing on technology, healthcare, and select consumer sectors [7][10] - The acquisition of SWK Holdings is expected to scale the portfolio by approximately $242 million, increasing exposure in healthcare and life sciences from 14% to 31% [9][11] Market Data and Key Metrics Changes - The company noted a competitive environment in private markets, with increased competition affecting pricing and origination activity [9][34] - The venture debt space is experiencing spread compression, although not as severe as in broader markets [34] Company Strategy and Development Direction - The company aims to enhance its portfolio through both organic and inorganic growth, with a focus on diversification and risk mitigation [8][9] - The acquisition of SWK Holdings is seen as a strategic move to enhance earnings power and diversify the asset base [9][20] - The company is committed to maintaining a disciplined approach to growth while leveraging the BC Partners credit platform for sourcing opportunities [8][10] Management's Comments on Operating Environment and Future Outlook - Management expects a muted repayment activity in Q4 2025 compared to Q3, with origination opportunities being actively pursued [25] - The integration of SWK is anticipated to enhance the company's financial profile and shareholder value, with expected accretion in earnings [20][55] - The ongoing government shutdown may delay SEC regulatory approval for the merger, with a projected close in early 2026 [22][55] Other Important Information - The company repurchased 397,983 shares during the third quarter under a $25 million stock repurchase program [22] - A regular distribution of $0.33 per share was declared for Q4 2025 [23] Q&A Session Summary Question: Expected closing date of the SWK merger and origination activity in Q4 - Management indicated that repayments would be muted in Q4, with origination activity utilizing the existing pipeline and BC Partners credit platform [25] Question: Integration of SWK portfolio and yield profile - The SWK portfolio is expected to have a slightly higher yield than Runway's existing portfolio, with plans to explore upsizing the best loans post-merger [27][29] Question: Drivers of realized loss and unrealized portfolio depreciation - Losses were primarily in the equity portfolio, with no specific sector theme identified [30] Question: Prepayment activity and expectations for next year - Prepayment activity is driven by M&A and refinancing options, with expectations for normal prepayment rates moving forward [31] Question: Competitive dynamics in venture debt space - Management noted spread compression in the venture debt space, but not as severe as in other markets [34] Question: Integration of SWK team post-merger - The SWK team will assist with the transition and new originations during the integration period [35] Question: Dividend declaration and earnings power - The board's decision on the dividend was based on anticipated prepayment activity and the need to cover the base dividend with Q4 earnings [38][40] Question: Characteristics of loans added to the Kadma JV - Loans added to the Kadma JV are growth loans, suited for that vehicle due to specific characteristics [46] Question: Accretion from the SWK merger - The merger is expected to be accretive in the first full quarter after closing, with potential for OID accretion [55][56]

Financial Data and Key Metrics Changes - Total investment income for Q3 2025 was $36.7 million, an increase from $35.1 million in Q2 2025, while net investment income rose to $15.7 million from $13.9 million in the previous quarter [15][16] - The weighted average portfolio risk rating increased to 2.42 in Q3 2025 from 2.33 in Q2 2025, indicating a slight deterioration in credit quality [15] - The dollar-weighted loan-to-value ratio increased from 29.6% to 31.4% [15] - The total investment portfolio's fair value decreased by 7.7% to $946 million from $1.02 billion in Q2 2025 [16] - NAV per share decreased by 1.9% to $13.55 from $13.66 at the end of Q2 2025 [18] Business Line Data and Key Metrics Changes - The company completed 11 investments totaling $128.3 million in Q3 2025, focusing on technology, healthcare, and select consumer sectors [7][10] - The acquisition of SWK Holdings is expected to scale the portfolio by approximately $242 million, increasing exposure in healthcare and life sciences from 14% to 31% of the overall portfolio [9][11] Market Data and Key Metrics Changes - The debt portfolio generated a dollar-weighted average annualized yield of 16.8% in Q3 2025, up from 15.4% in Q2 2025 [16] - Total available liquidity was $371.9 million, including unrestricted cash and cash equivalents, with a borrowing capacity of $364 million [18] Company Strategy and Development Direction - The company aims to enhance its portfolio through both organic and inorganic growth, with a focus on diversification and risk mitigation [8][9] - The merger with SWK Holdings is seen as a strategic move to enhance earnings power and diversify the asset base [9][21] - The company is committed to maintaining a disciplined approach to growth while leveraging the BC Partners credit platform for sourcing opportunities [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of SWK Holdings and its potential to enhance the company's market position [14][21] - The company anticipates a muted repayment activity in Q4 2025, with origination activity expected to remain strong [26] - Management acknowledged competitive pressures in the venture debt space but noted that spread compression has not been as severe as in broader markets [36] Other Important Information - The company declared a regular distribution of $0.33 per share for Q4 2025, with net investment income of $0.43 per share [24][40] - The merger with SWK is structured as a tax-free reorganization with an estimated purchase price of approximately $220 million [22] Q&A Session Summary Question: What is the expected closing date of the SWK merger and its impact on origination and repayment activity? - Management expects repayments to be muted in Q4 2025, with origination activity utilizing the existing pipeline and BC Partners credit platform [26] Question: What is the yield profile of the SWK portfolio compared to the existing portfolio? - The SWK portfolio has a slightly higher yield than the existing portfolio, with complete pro formas to be provided in the N-14 filing [27][29] Question: What were the main drivers of realized losses in the portfolio? - Losses were mainly in the equity portfolio, driven by idiosyncratic factors such as expirations of warrants and liquidations of IPO shares [31] Question: How does the company plan to integrate the SWK team? - The SWK team will assist with the transition and new originations during the integration period [37] Question: Will the merger be accretive in 2026? - Management expects the merger to be accretive in the first full quarter after closing [57]

Financial Data and Key Metrics Changes - GigaCloud reported a robust 10% year-over-year revenue growth, achieving a quarterly revenue of $333 million and an EPS of $0.99, marking a new record [2][12] - Net income reached $37 million, representing 11.2% of revenue, with a sequential expansion of 50 basis points [16] - Operating cash flows for the quarter were $78 million, with total liquidity of $367 million, maintaining a debt-free status [16] Business Line Data and Key Metrics Changes - Service revenues declined by 2% year-over-year, primarily due to reduced U.S. ocean shipping and drayage revenues, while product revenue grew by 16% year-over-year [12][13] - The service margin was reported at 9.1%, down 2.3% sequentially, influenced by higher last-mile delivery costs [12][13] - The product margin expanded by 70 basis points to 29.9%, benefiting from lower ocean shipping costs [14] Market Data and Key Metrics Changes - The marketplace GMV rose approximately 21% year-over-year, reaching nearly $1.5 billion, with active 3P sellers increasing by 17% to 1,232 [6][8] - European revenues surged by 70% year-over-year to a record $100 million, highlighting the region as a significant growth engine [8] Company Strategy and Development Direction - GigaCloud's strategy includes M&A as a cornerstone for long-term growth, with the recent acquisition of Noble House serving as a validation of this approach [3][10] - The upcoming acquisition of New Classic Home Furnishings is aimed at diversifying the business and enhancing brick-and-mortar wholesale capabilities [4][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic challenges, emphasizing a focus on execution and diversification to mitigate risks [5][21] - The company anticipates that strategic initiatives from the New Classic acquisition will reflect in financial performance over the next four to six quarters [11][16] Other Important Information - GigaCloud has executed approximately $16 million in share buybacks to date, part of a $111 million buyback plan announced in August [16] - The fourth-quarter revenue outlook is projected to be between $328 million and $344 million [17] Q&A Session Summary Question: Thoughts on additional M&A acquisitions - Management is currently focused on closing the New Classic acquisition but is looking for new opportunities concurrently, though unlikely in the immediate future [20] Question: Impact of recent rate cuts on the housing market - Management remains hopeful for a housing market rebound but emphasizes a focus on execution and diversification to drive growth regardless of macroeconomic conditions [21] Question: Drivers of growth in Noble House - Noble House has been outperforming in both the U.S. and Europe, contributing significantly to growth in Q3 [24] Question: Confidence in Q4 growth - Management is optimistic about Q4 performance, expecting strong contributions from Europe and the original non-acquired parts of the business [26]

Financial Data and Key Metrics Changes - Total investment income for Q3 2025 was $36.7 million, an increase from $35.1 million in Q2 2025, while net investment income rose to $15.7 million from $13.9 million [15][16] - The weighted average portfolio risk rating increased to 2.42 from 2.33 in the previous quarter [15] - The dollar-weighted loan-to-value ratio increased from 29.6% to 31.4% [15] - The total investment portfolio's fair value decreased by 7.7% to $946 million from $1.02 billion [16] - NAV per share decreased by 1.9% to $13.55 from $13.66 [18] Business Line Data and Key Metrics Changes - The company completed 11 investments totaling $128.3 million in Q3 2025, including new investments in Federal Hearings and Appeals Services and DigiCert Inc. [10][11] - The acquisition of SWK Holdings is expected to scale the portfolio by approximately $242 million, increasing exposure in healthcare and life sciences from 14% to 31% [9][11] Market Data and Key Metrics Changes - The debt portfolio generated a dollar-weighted average annualized yield of 16.8%, up from 15.4% in the previous quarter [16] - Total available liquidity was $371.9 million, including unrestricted cash and cash equivalents [18] Company Strategy and Development Direction - The company is focused on both organic and inorganic growth, with a definitive merger agreement to acquire SWK Holdings to enhance its portfolio and earnings power [5][9] - The strategy includes diversifying the portfolio through smaller position sizes and expanding financing solutions [7][11] - The company aims to maintain a disciplined approach to growth while leveraging the BC Partners credit platform for sourcing opportunities [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the merger with SWK Holdings, anticipating it will enhance earnings power and financial profile [20][21] - The company expects to see a normal course of prepayments and is optimistic about origination activity in Q4 2025 [26][33] - Management acknowledged competitive dynamics in the venture debt space, noting some spread compression but not as severe as in broader markets [37] Other Important Information - The company declared a regular distribution for Q4 2025 of $0.33 per share, with net investment income of $0.43 per share [24][42] - The merger is structured as a NAB-for-NAB transaction with an estimated purchase price of approximately $220 million [21] Q&A Session Summary Question: What should be expected regarding origination and repayment activity in Q4? - Management indicated that repayments would likely be muted compared to Q3, with ongoing origination opportunities available [26] Question: What is the yield profile expected after integrating the SWK portfolio? - The SWK portfolio is expected to have a slightly higher yield than the current portfolio, with pro formas to be provided in future filings [27][28] Question: What drove the realized loss and unrealized portfolio depreciation? - Losses were primarily in the equity portfolio, attributed to idiosyncratic factors rather than sector-wide issues [31][32] Question: What is driving prepayment activity, and is it expected to continue? - Prepayment activity is driven by M&A activity and companies finding cheaper refinancing options, with expectations for normal prepayment rates moving forward [33] Question: How will the SWK team be integrated into the company? - The SWK team will assist with the transition and new originations during the integration period [38] Question: Will the merger be accretive in 2026? - Management expects the merger to be accretive in the first full quarter after closing [59] Question: What stage of development do typical SWK investments target? - SWK targets growth-stage companies that are generating revenue but are generally pre-profit [62]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $567 million, down $34 million year-over-year, primarily due to increased accounts receivable cleanup of approximately $20 million [11] - Adjusted EBITDA was $243 million for the quarter, reflecting a margin of 42.9%, which was up 60 basis points sequentially from Q2 [12] - Adjusted free cash flow in the quarter was $122 million, representing a 22% margin or $0.67 per share [15] Business Line Data and Key Metrics Changes - Leasing revenues were $434 million in Q3, a 5% year-over-year decline, but only down 1.3% when excluding write-offs related to accounts receivable cleanup [12][13] - Sales in new and rental units increased by 10% year-over-year [11] - VAPS revenues were flat year-over-year despite volume headwinds, while storage portfolio saw a 10% improvement in rate and mix, partially offsetting a 14% volume decline [13] Market Data and Key Metrics Changes - The Canadian market experienced a slowdown, contributing to a revenue decline of approximately $130 million [35] - The company noted that traditional storage business remains weak, while climate-controlled storage units on rent were up 44% year-over-year [50] Company Strategy and Development Direction - The company aims to shift revenue towards more differentiated, higher-value offerings to create consistent results and reduce variability from commoditized lines of business [6][8] - A multi-year network optimization plan is underway to enhance operational efficiency and reduce structural costs, with an estimated net book value of rental fleet units for disposal between $250 million and $350 million [19][18] - The focus is on reestablishing organic growth through local market initiatives and enterprise accounts, with expectations for enterprise accounts revenue to grow approximately 5% year-over-year in the second half [22][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the need for a more conservative approach to guidance to minimize the risk of negative surprises, emphasizing accountability and credibility [8][9] - The company expects Q4 2025 revenue of approximately $545 million and adjusted EBITDA of approximately $250 million, with a full-year 2025 revenue outlook of around $2.26 billion [20] - Management expressed optimism about the potential for growth in the enterprise portfolio and value-added products, despite challenges in the traditional storage market [23][26] Other Important Information - The company has paid down $84 million in borrowings and returned $21 million to shareholders through repurchases and dividends [16] - A review of real estate positions is ongoing to reduce the real estate footprint while maintaining market coverage, with real estate costs having increased by over 10% per year [17] Q&A Session Summary Question: Inquiry about revenue outlook and underperformance - Management identified seasonal storage components and write-off activities as significant contributors to lower revenue outlook, with the Canadian market also underperforming [34][35] Question: Impact of federal government shutdowns - Management reported negligible disruption from government shutdowns, maintaining enthusiasm for future opportunities in government sectors [39] Question: Clarification on fleet review and potential disposals - Management clarified that the fleet being reviewed for disposal represents about 10% of total fleet, primarily excess units not needed for future growth [44][45] Question: Trends in order book and activations - Management noted that the modular order book is down about 1% year-over-year, with activations showing low single-digit growth recently, while traditional storage remains weak [50] Question: Changes in guidance philosophy - Management emphasized a shift towards conservative guidance to avoid negative surprises, focusing on controllable outcomes [86][87]

Financial Data and Key Metrics Changes - In Q3 2025, net revenue grew by 26% year-over-year, driven by a 20% organic growth rate, marking the fourth consecutive year of double-digit organic growth [4][11] - Gross profit increased by 30% to $67.1 million, up from $51.6 million last year, due to revenue growth and solid project execution [12] - Pre-tax income rose by 91% to a record $14.3 million, while net income increased by 87% to $13.7 million [13] - Adjusted EBITDA reached a new record of $23.1 million, representing a 53% increase from the previous year [13] - For the nine months of 2025, contract revenue was up 20% year-over-year to $508 million, with net revenue increasing by 27% to $275 million [14] Business Line Data and Key Metrics Changes - The energy segment constitutes about 85% of revenue, while engineering and consulting work accounts for approximately 15% [5] - Utility business, making up 41% of revenue, continues to perform well with a solid foundation of recurring revenue from long-term contracts [5] - Work for state and local governments, which represents 44% of revenue, is growing organically at a double-digit pace [6] Market Data and Key Metrics Changes - Demand for electricity is increasing, driven by factors such as data centers, electric vehicles, and the electrification of building systems [9][10] - The U.S. electricity load growth is forecasted to be between 0.7 and 1.2 terawatt hours over the next decade, indicating a dynamic long-term growth market [9] Company Strategy and Development Direction - The company is raising its full-year financial targets for 2025, expecting net revenue between $360 million and $365 million and adjusted EBITDA in the range of $77 million to $78 million [17] - The company is focused on cross-selling capabilities, particularly with recent acquisitions, to enhance growth opportunities [22][25] - The company is well-positioned to help utilities and communities navigate significant infrastructure investment cycles driven by aging infrastructure modernization [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, citing improved performance in cross-selling and a strong pipeline of opportunities [22][24] - The company does not foresee workforce sourcing as an impediment to growth, reporting a stable employee count and zero turnover in senior management [26][27] - Management remains optimistic about securing large contracts in New York, which are expected to drive growth in 2026 [41] Other Important Information - The company ended the quarter with only $16 million in net debt, providing financial flexibility for targeted acquisitions [15] - Free cash flow for the first nine months was $34 million, consistent with the previous year, indicating strong cash generation [15] Q&A Session Summary Question: What is driving the increased customer demand and how does the company plan to manage capacity? - Management noted that rising electricity prices and increased demand are key factors, along with improved cross-selling capabilities leading to new revenue streams [22][23] Question: Can you discuss the collaboration between APG and other areas of the company? - Management highlighted effective collaboration across service lines, with upfront consulting work feeding into project planning and execution [25] Question: How is the company managing workforce flexibility and potential growth impediments? - Management stated that they do not see workforce sourcing as a growth impediment, with effective hiring practices and a stable senior management team [26][27] Question: What is the status of the potential $100 million contract with New York? - Management remains optimistic about securing several large contracts in New York, which are expected to contribute to growth in 2026 [41]

Financial Data and Key Metrics Changes - In Q3 2025, net revenue grew by 26% year-over-year, driven by a 20% organic growth rate, marking the fourth consecutive year of double-digit organic growth [4][11] - Gross profit increased by 30% to $67.1 million, up from $51.6 million last year, due to revenue growth and solid project execution [11][12] - Pre-tax income rose by 91% to a record $14.3 million, while net income increased by 87% to $13.7 million [13][14] - Adjusted EBITDA reached a new quarterly record of $23.1 million, representing a 53% increase from the previous year [13] - For the nine months of 2025, contract revenue was up 20% year-over-year to $508 million, with net revenue increasing by 27% to $275 million [14] Business Line Data and Key Metrics Changes - The energy segment constitutes about 85% of revenue, while engineering and consulting work accounts for approximately 15% [5] - Utility business, making up 41% of revenue, continues to perform well with long-term contracts providing a strong foundation of recurring revenue [5][6] - Work for state and local governments, which represents 44% of revenue, is growing organically at a double-digit pace [6] Market Data and Key Metrics Changes - Demand for electricity is increasing, driven by data centers, electrification, and new industrial demand [9][10] - The U.S. electricity load growth is forecasted to be between 0.7 TWh and 1.2 TWh over the next decade, indicating a dynamic long-term growth market [9] Company Strategy and Development Direction - The company is raising its full-year financial targets for 2025, expecting net revenue between $360 million and $365 million and adjusted EBITDA in the range of $77 million to $78 million [17][18] - The company is focused on cross-selling capabilities, particularly with recent acquisitions, to enhance growth and operational efficiency [22][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market, noting that electricity prices are rising and demand is increasing, which supports continued growth [22] - The company is well-positioned to navigate the transformation in electricity markets and capitalize on infrastructure investment cycles [10] Other Important Information - The company ended the quarter with only $16 million in net debt, providing financial flexibility for future acquisitions [15][16] - Free cash flow for the first nine months was $34 million, consistent with the previous year, indicating strong cash generation [15] Q&A Session Summary Question: What is driving the increased customer demand and how does the company plan to manage capacity? - Management noted that the market is strong, with rising electricity prices and increased demand, and emphasized improved cross-selling capabilities leading to new revenue [22][23] Question: Can you discuss the collaboration between APG and other areas of the company? - Management highlighted effective collaboration across service lines, with upfront consulting work feeding into project planning and execution [25] Question: How is the company managing workforce flexibility and potential hiring challenges? - Management stated that they do not see workforce sourcing as an impediment to growth, reporting zero turnover in senior management and a growing employee count [26][27] Question: Are there any updates on the potential $100 million contract with the state of New York? - Management remains optimistic about several large contracts in New York and expects them to drive growth in 2026 [41]