Financial Data and Key Metrics Changes - Revenues increased by 8% in Q4 2025, leading to a 3% increase for the year, with product and service revenues up 4% excluding interest [3][4] - Total dollars processed set a record, up 19% for the year, and transactions processed increased by 30% [3] - Operating cash flow for the year was $1.5 million, with nearly $7.5 million in cash on hand for future investments [5][6] Business Line Data and Key Metrics Changes - ACH revenue grew over 30% in Q4 and 33% for the full year, with pinless debit dollars processed up 81% [4][20] - Card revenue increased by 7% in Q4 and finished the year up 3%, driven by PayFac growth [4][8] - Output Solutions saw a 6% revenue increase in Q4, with pieces mailed up 11% and electronic documents processed up 18% [4][19] Market Data and Key Metrics Changes - Card Issuing revenues were down in Q4 but improved relative to Q3, with expectations for recovery in 2026 due to easier comps from prior year transactions [5][18] - The company reported no single client accounting for more than 10% of total revenue, indicating a diversified customer base [5] Company Strategy and Development Direction - The company aims to increase its share of customers' wallets and build a portfolio of recurring revenues through new product introductions [7][15] - The acquisition of PostCredit is seen as a strategic move to enhance business banking solutions and improve customer risk management [16] - The Usio One initiative focuses on cross-selling opportunities across different business units [9][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting 10%-12% revenue growth and continued positive adjusted EBITDA [22] - The company is focused on completing tasks that offer immediate returns on investment while being cautious with guidance [22] Other Important Information - The company has reported positive adjusted EBITDA for three consecutive years and anticipates maintaining this trend in fiscal 2026 [6] - The company is actively engaged with large commercial and governmental entities for its Card Issuing services [17] Q&A Session Summary Question: Impact of a lost customer on 2025 revenue - Management estimated a loss of around $3 million in revenue due to a customer loss, which would have significantly impacted growth [24][25][26] Question: Update on Usio One initiative and sales force reorganization - Management reported a good transition with successful sales outreach campaigns and positive responses from customers [27][28][29] Question: Details on new large customers and onboarding cadence - Management provided insights on three large projects, with significant revenue expected from a school voucher program and partnerships with a major bank and payment company, set to go live in Q3 2026 [30][31][32] Question: Visibility on 2026 growth guidance - Management indicated that there are numerous deals in implementation that could meet growth targets, but timing of go-lives is uncertain [33] Question: Future of ACH growth - Management confirmed that ACH is expected to continue its strong performance into Q1 2026, with ongoing momentum [38] Question: SG&A expenses outlook - Management aims to keep SG&A expenses flat compared to 2025, with a focus on efficiency [39][40][46] Question: Cross-selling targets for Usio One - Management noted that success will be measured by the diversity of contracts signed across business units, indicating positive early results [41][42]

Financial Data and Key Metrics Changes - Fourth quarter revenue was over $5 million, representing a 128% increase compared to $2.3 million in Q4 2024 [23] - Full year revenue for 2025 was $13.6 million, up 5% from $12.9 million in 2024 [24] - Gross profit for Q4 2025 was $2.7 million, a 226% increase from Q4 2024 [24] - Gross margin for Q4 2025 was 50.9%, marking a 1,530 basis points expansion from Q4 2024 [25] - Net loss for Q4 2025 was $5.9 million, compared to a net loss of $10.4 million in the same period of the prior year [27] - Full year net loss was $35.6 million, down from $40.7 million in 2024 [28] - Cash burn for Q4 2025 was $5.7 million, a 30% reduction from $8.2 million in Q4 2024 [28] Business Line Data and Key Metrics Changes - Sold 16 units in Q4 2025 compared to 9 units in Q4 2024, indicating increased demand across all business lines [23] - The introduction of the next-generation Swoop system and Optive AI software has led to significant traction in hospitals and neurology offices [6][10] Market Data and Key Metrics Changes - FDA clearance for the updated Swoop system in December 2025 enhances its clinical utility, particularly in stroke workflows [7] - The approval of the first-generation Swoop system in India opens a new market opportunity [8] - Positive market feedback on the Swoop system with Optive AI software supports broader adoption [19] Company Strategy and Development Direction - The company aims to expand its market presence through continuous innovation and the introduction of new software releases [9] - Focus on leveraging clinical data to support adoption and drive sales in hospitals and neurology offices [10][15] - Plans to launch the next-generation Swoop scanner in international markets in the second half of 2026 [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of the Swoop system and its unique position in the ultra-low field MRI market [6] - The company anticipates a progressive strengthening of revenue throughout 2026, driven by multi-unit hospital deals and international expansion [30] - Management highlighted the importance of maintaining spending discipline while investing in growth opportunities [32] Other Important Information - The company raised over $20 million in equity and $15 million in long-term debt to strengthen its capital position [21][22] - The device's MSRP was increased to $590,000, which is expected to enhance ROI for hospitals [41] Q&A Session Summary Question: Key assumptions surrounding 2026 guidance - Management indicated that guidance is based on growth catalysts across three business verticals, with expectations for progressive revenue strengthening throughout 2026 [38][39] Question: Pipeline status and strength - Management confirmed that the pipeline remains strong and diversified, with multiple IDN deals in progress, although larger deals may take longer due to budget cycles [43][44] Question: Service revenue trends - Management acknowledged that service revenue was lower in Q4 due to accounting adjustments related to technology upgrades, but expects long-term growth in this area [57]

Financial Data and Key Metrics Changes - For the fourth quarter, net sales increased 24% to $1.7 billion, with a comparable sales increase of just over 15% driven by an 8% increase in comparable ticket and a 7% increase in comparable transactions [15][19] - For the full year, net sales increased 23% to $4.8 billion, supported by a comparable sales increase of nearly 13% [19][20] - Adjusted net income for fiscal 2025 grew 33% to $370 million, and adjusted earnings per share increased 32% to $6.67 per share [21] Business Line Data and Key Metrics Changes - The company opened 150 net new stores in 2025, growing its store count by 8.5% to a total of 1,921 stores [6][16] - Adjusted gross profit for the year increased 25% to $1.7 billion, with a gross margin of 36.1%, an increase of approximately 50 basis points compared to last year [20] Market Data and Key Metrics Changes - The company experienced broad-based growth across all merchandising worlds, with strength in all 170 districts and across all income cohorts [7][10] - The fourth quarter saw the strongest holiday performance since becoming a public company, with sales growth of 24% [6][7] Company Strategy and Development Direction - The company has defined a new strategy focused on three pillars: a maniacal focus on the target customer, delivering a connected customer journey, and cross-functional collaboration [8][9] - The marketing strategy has shifted towards social media engagement, allowing the company to dynamically engage with customers and amplify viral trends [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's positioning for consistent, durable growth, despite a challenging macro environment with geopolitical uncertainties [14][23] - The outlook for fiscal 2026 anticipates sales in the range of $5.2 billion to $5.3 billion, representing a 10% increase at the midpoint [24] Other Important Information - The company ended the year with approximately $932 million in cash equivalents and investments, with inventory increasing by 28% to approximately $847 million [21][22] - Capital expenditures for fiscal 2026 are expected to be between $230 million and $250 million, reflecting continued investments in new stores and technology [25] Q&A Session Summary Question: Drivers behind the magnitude of comps - Management highlighted the crew's execution and a focus on customer engagement through social media as key drivers of success [30][31] Question: Comp momentum and guidance - Management noted broad-based growth across all assortments and emphasized the importance of direct customer engagement through social media [36][37] Question: Investments to sustain momentum - Management confirmed a commitment to reinvest in marketing and labor to support growth while balancing profitability [50][51] Question: Traffic between new and existing customers - Management reported growth in both new and existing customers, attributing success to effective marketing strategies [67][68] Question: Pricing power beyond $5 - Management explained that changes in merchandising and customer engagement have allowed for greater pricing flexibility above $5 [72][73]

Financial Data and Key Metrics Changes - For Q4 2025, revenue was $26.2 million, an increase of $25.0 million year-over-year and $16.6 million sequentially, driven by strong defense and government demand [20] - Full year 2025 revenue reached $40.7 million, up $25.1 million year-over-year [21] - Gross margin for Q4 was 4.2%, up 85% year-over-year, while for the full year it was 3.1%, up 332 basis points year-over-year [20][21] - Operating expenses increased to $67.8 million in 2025 from $32.9 million in the prior year, reflecting planned investments for growth [22] Business Line Data and Key Metrics Changes - The company is scaling Black Widow drone output to 1,000 units per month in the first half of 2026, with USV boat manufacturing expected to have first deliveries in Q2 2026 [16] - The manufacturing expansion has increased facility square footage from 36,000 sq ft to 254,000 sq ft across various locations [17] Market Data and Key Metrics Changes - The company is experiencing increased demand for its products, particularly in the defense sector, with a focus on international expansion in the Middle East and Asia Pacific [26] - The company has received a letter of request from Ukrainian forces to replace Chinese ISR drones, indicating a significant market opportunity [13] Company Strategy and Development Direction - The company is focusing on expanding its USV division, with an estimated investment of $30-$40 million to fully operationalize it [24] - A joint development agreement with a Ukrainian state-owned partner aims to bring new battle-proven technology to USVs, enhancing the company's capabilities in the defense market [13] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about maintaining revenue momentum throughout 2026, supported by a diversified customer base and growing international presence [26] - The company is cautious about providing annual guidance until contracts are secured, but is confident in achieving strong performance [26] Other Important Information - The company has significantly improved its cash position, increasing from $9.2 million at the end of 2024 to $167.9 million at the end of 2025, providing financial flexibility for strategic initiatives [24][25] - The regulatory landscape shift following NDAA Section 1709 has created new opportunities while requiring enhanced focus on supply chain security [16] Q&A Session Summary Question: Can you provide scenarios for what 2026 could look like? - Management indicated a range of expectations between $100 million and $170 million for 2026, comfortable in the top half of that range but not ready to commit until contracts are secured [32] Question: How many ISR drones could potentially be replaced in Ukraine? - Management noted that Ukrainian forces are currently using 350,000 ISR drones per year, presenting a significant opportunity for replacement [34] Question: Is there an increase in RFPs due to heightened conflict in waterways? - Management confirmed an uptick in inquiries and potential RFPs from Gulf States, particularly related to counter-drone capabilities [35] Question: Will the full-rate production contract be a single order or multiple tranches? - Management expects to receive a full-rate production contract soon, with possibilities of immediate orders related to Epic Fury [48] Question: Will production ramp up to 1,000 drones per month before contracts are secured? - Management confirmed that production is already ramping up to meet anticipated demand [54]

Financial Data and Key Metrics Changes - Revenues increased by 8% in the fourth quarter, leading to a 3% increase for the year, with product and service revenues up 4% excluding interest [2][3] - Total dollars processed set a record, up 19% for the year, and transactions processed increased by 30% [2] - Operating cash flow for the year was $1.5 million, with nearly $7.5 million in cash on hand for investments [4][5] Business Line Data and Key Metrics Changes - ACH revenue grew more than 30% for both the quarter and the full year, making it the fastest-growing segment [2][3] - Card revenue increased by 7% in the fourth quarter and finished the year up 3%, driven by PayFac growth [3] - Output Solutions saw a 6% revenue increase in the fourth quarter, with pieces mailed up 11% and electronic documents processed up 18% [3] Market Data and Key Metrics Changes - The majority of revenue in the quarter was generated from ongoing programs, with no single client accounting for more than 10% of total revenue, indicating a diversified customer base [4] - Card Issuing revenues were down in the quarter but improved relative to the third quarter, with profitability also improving [3] Company Strategy and Development Direction - The company aims to increase its share of customers' wallets and build a portfolio of recurring revenues through new products and services [6][14] - The acquisition of PostCredit is seen as a strategic move to enhance business banking solutions and improve customer risk management [14][16] - The company is focused on cross-selling opportunities through the Usio One initiative, which aims to integrate various services for clients [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting 10%-12% revenue growth and continued positive adjusted EBITDA [21] - The company is confident in its ability to rebound from past challenges, particularly in Card Issuing, and anticipates strong performance in Q1 2026 [18][20] - There is a strong pipeline across all business lines, with ongoing efforts to increase wallet share and improve profitability [21] Other Important Information - The company reported positive adjusted EBITDA for three consecutive years and expects to maintain this trend in fiscal 2026 [5] - The company has made significant investments in expanding both tangible and intangible fixed assets, including share repurchases [5] Q&A Session Summary Question: What would 2025 revenue have looked like without the loss of a customer? - Management estimated a loss of around $3 million due to the customer loss, which impacted Card Issuing revenue [24][25] Question: How is the Usio One initiative progressing? - The transition has been positive, with changes in the sales team structure and successful cross-selling efforts noted [27][29] Question: What are the details on new large customers signed for 2026? - Three large projects were mentioned, including a school voucher program and partnerships with a major bank and a top payment company, expected to go live in Q3 [31][32] Question: How much of the 10%-12% growth is already booked? - Management indicated that there are numerous deals in implementation, but the timing of their go-live is uncertain [34] Question: Will SG&A expenses continue to rise in 2026? - SG&A expenses are expected to remain flat or see moderate growth, with a focus on maintaining efficiency [39][40]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $5.3 million, up 128% from $2.3 million in Q4 2024 [19] - Full year 2025 revenue was $13.6 million, a 5% increase from $12.9 million in 2024 [21] - Gross profit for Q4 2025 was $2.7 million, up 226% compared to Q4 2024 [21] - Gross margin for Q4 2025 was 50.9%, representing a 1,530 basis points increase from Q4 2024 [22] - Net loss for Q4 2025 was $5.9 million, compared to a net loss of $10.4 million in Q4 2024 [24] - Full year net loss was $35.6 million, down from $40.7 million in 2024 [25] Business Line Data and Key Metrics Changes - The company sold 16 units in Q4 2025 compared to 9 units in Q4 2024, indicating increased demand across all business lines [20] - The introduction of the next-generation Swoop system and Optive AI software has led to significant growth in the second half of 2025 [21][28] Market Data and Key Metrics Changes - The FDA clearance of the updated Swoop software in December 2025 has enhanced the system's capabilities, particularly in stroke workflows [6] - The approval of the first-generation Swoop system in India opens a new market opportunity for the company [7] Company Strategy and Development Direction - The company aims to expand its market presence in neurology offices and international markets, leveraging the strong clinical and economic value of its technology [4][16] - Continuous innovation and the introduction of new software releases are central to the company's strategy for growth [9][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of the Swoop system, citing strong market feedback and the potential for broader adoption [5][16] - The company anticipates revenue growth between $20 million and $22 million for 2026, representing a year-over-year growth of approximately 55% [27] Other Important Information - The company has strengthened its capital position by raising over $20 million in equity and $15 million in debt, extending its cash runway into 2028 [18][26] - The company is focused on reducing cash burn, which was down 30% in Q4 2025 compared to the previous year [25][26] Q&A Session Summary Question: Key assumptions surrounding 2026 guidance - Management indicated that the guidance is based on growth catalysts across three business verticals, with expectations for progressive strengthening of revenue throughout 2026 [33][35] Question: Pipeline status and multi-unit orders - Management confirmed that the pipeline remains strong and diversified, with several IDN deals in progress, although larger deals may take longer to finalize due to budget cycles [40][41] Question: Service revenue trends - Management acknowledged that service revenue was lower in Q4 due to accounting adjustments related to core technology upgrades, but expects growth in the long term [53][54]

Financial Data and Key Metrics Changes - For Q4 2025, revenue was $26.2 million, an increase of $25.0 million year-over-year and $16.6 million sequentially, driven by strong defense and government demand [18] - Full year 2025 revenue reached $40.7 million, up $25.1 million year-over-year [19] - Gross margin for Q4 was 4.2%, up 85% year-over-year, while for the full year it was 3.1%, up 332 basis points year-over-year [18][19] - Operating expenses increased to $67.8 million in 2025 from $32.9 million in the prior year, reflecting planned investments for growth [19][20] - Cash position improved significantly from $9.2 million at the end of 2024 to $167.9 million at the end of 2025 [22] Business Line Data and Key Metrics Changes - The company is scaling Black Widow drone output to 1,000 units per month in the first half of 2026, with USV boat manufacturing expected to have first deliveries in Q2 2026 [14][15] - The manufacturing expansion has increased facility square footage from 36,000 sq ft to 254,000 sq ft across various locations [15] Market Data and Key Metrics Changes - The company is experiencing increased demand for its USVs and counter-drone capabilities, particularly in regions like the Gulf of America and the Strait of Hormuz [6][34] - There is a significant opportunity to replace approximately 350,000 ISR drones annually for Ukrainian forces, indicating a strong market potential [32] Company Strategy and Development Direction - The company is focusing on expanding its USV division, with an estimated investment of $30-$40 million to fully operationalize it [21] - A joint development agreement with a Ukrainian state-owned partner aims to bring new battle-proven technology to USVs, enhancing the company's competitive position [12] - The strategic expansion into maritime operations through Blue Ops is seen as a significant advancement, extending capabilities beyond air and land domains [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining revenue momentum throughout 2026, supported by a diversified customer base and growing international presence [24] - The ongoing geopolitical developments are influencing international expansion plans, particularly in the Middle East and Asia Pacific [24] Other Important Information - The company is not providing annual guidance at this time but expects to update the market as contracts are secured [24] - The regulatory landscape shift following NDAA Section 1709 implementation has created new opportunities while requiring enhanced focus on supply chain security [14] Q&A Session Summary Question: Can you provide different scenarios for what 2026 could look like? - Management indicated a range from $100 million to $170 million in potential revenue, comfortable in the top half of that range but not ready to commit until contracts are secured [30] Question: How many ISR drones could potentially be replaced in Ukraine? - Management noted that Ukrainian forces are currently using approximately 350,000 ISR drones annually, indicating a substantial opportunity for replacement [32] Question: Have you noticed any increase in interest for the boat segment due to heightened conflict? - Management confirmed an uptick in inquiries and potential RFPs from Gulf States, particularly for counter-drone solutions [34] Question: Will the full-rate production contract be a single order or multiple tranches? - Management expects to receive a full-rate production contract soon, with possibilities of immediate orders related to Epic Fury [46] Question: Will production ramp up to 1,000 drones per month before contracts are secured? - Management confirmed that production is already ramping up to meet anticipated demand [52]

Financial Data and Key Metrics Changes - For the fourth quarter, net sales increased by 24% to $1.7 billion, with a comparable sales increase of just over 15% driven by an 8% increase in comparable ticket and a 7% increase in comparable transactions [15][16] - For the full year, net sales increased by 23% to $4.8 billion, supported by a comparable sales increase of nearly 13% [18][19] - Adjusted net income for fiscal 2025 grew by 33% to $370 million, and adjusted earnings per share increased by 32% to $6.67 per share [20] Business Line Data and Key Metrics Changes - The company opened 150 net new stores in 2025, resulting in an 8.5% increase in store count, ending the year with 1,921 stores across 46 states [5][19] - Adjusted gross profit for the year increased by 25% to $1.7 billion, with a gross margin of 36.1%, an increase of approximately 50 basis points compared to the previous year [19] Market Data and Key Metrics Changes - The company experienced broad-based growth across all merchandising worlds, with strength seen in all 170 districts and across all income cohorts [6][9] - The fourth quarter saw the strongest holiday performance since becoming a public company, indicating a positive market response [5][6] Company Strategy and Development Direction - The company has implemented a customer-centric strategy focused on Gen Alpha, Gen Z, and millennial parents, enhancing engagement through social media and targeted marketing [7][8] - The strategy is underpinned by three pillars: a focus on the target customer, delivering a connected customer journey, and cross-functional collaboration [7][8] - The company aims to expand its brand and customer reach while maintaining a strong focus on value and customer experience [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's positioning for consistent, durable growth despite a challenging macro environment [13][23] - The outlook for fiscal 2026 anticipates sales in the range of $5.2 billion to $5.3 billion, representing a 10% increase at the midpoint, with comparable sales growth expected between 3% and 5% [24][25] - Management acknowledged the complexities of the current macro environment, including geopolitical uncertainties and consumer spending pressures [23][41] Other Important Information - The company has redirected marketing spend towards social media to enhance customer engagement and drive traffic [11][12] - Capital expenditures for fiscal 2026 are expected to be between $230 million and $250 million, reflecting continued investment in new stores and technology [25] Q&A Session Summary Question: Drivers behind the magnitude of comps and structural changes - Management highlighted the focus on customer engagement and a connected customer journey as key drivers of recent success, emphasizing the importance of their crew in executing the strategy [31][34] Question: Comp momentum and guidance for the year - Management noted broad-based growth across all assortments and emphasized the importance of maintaining a disciplined approach to growth while being aware of the challenging macro environment [37][41] Question: Pricing strategy and customer response - Management explained that the company has evaluated products above $5 to ensure they provide compelling value, leading to customer acceptance of higher price points [72][74] Question: Factors for sustaining momentum and new sales drivers - Management indicated that the ability to react to trends and engage with customers directly will be crucial for sustaining growth, alongside improved inventory management [78][80]

Financial Data and Key Metrics Changes - Micron reported total fiscal Q2 revenue of $23.9 billion, up 75% sequentially and 196% year-over-year, marking the fourth consecutive quarterly revenue record [23] - DRAM revenue reached a record $18.8 billion, up 207% year-over-year and 74% sequentially, representing 79% of total revenue [23] - NAND revenue was a record $5 billion, up 169% year-over-year and 82% sequentially, accounting for 21% of total revenue [24] - Consolidated gross margin for fiscal Q2 was 75%, up 18 percentage points sequentially and nearly doubled from a year ago [24] - Non-GAAP diluted EPS for fiscal Q2 was $12.20, reflecting 155% sequential growth and 682% growth year-over-year [27] Business Line Data and Key Metrics Changes - Cloud Memory Business Unit (CMBU) revenue was a record $7.7 billion, up 47% sequentially, representing 32% of total revenue [25] - Core Data Center Business Unit (CDBU) revenue reached a record $5.7 billion, up 24% of total revenue, with gross margins of 74% [25] - Mobile and Client Business Unit (MCBU) revenue was a record $7.7 billion, up 81% sequentially, with gross margins of 79% [25][26] - Automotive and Embedded Business Unit (AEBU) revenue was a record $2.7 billion, up 57% sequentially, with gross margins of 68% [26] Market Data and Key Metrics Changes - AI demand is driving DRAM and NAND data center bit total addressable market (TAM) to exceed 50% of the industry TAM for the first time in calendar 2026 [8] - Server units are expected to grow in the low teens percentage range in calendar 2026, driven by both AI and traditional server demand [9] - The mix of flagship smartphones shipping with 12 gigabytes or more of DRAM increased to nearly 80% in calendar Q4, up from under 20% a year ago [14] Company Strategy and Development Direction - Micron is focusing on strategic customer agreements (SCAs) to provide stability and visibility in its business model, with the first five-year SCA signed [5][40] - The company plans to increase R&D investments in fiscal 2027 to capitalize on opportunities in the AI era [7] - Micron is expanding its global manufacturing footprint, including the acquisition of the Tongluo site and new fabs in Idaho and Singapore [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained memory demand driven by AI and structural supply constraints [4] - The company expects DRAM and NAND industry bit demand to remain constrained by supply in calendar 2026 [18] - Micron anticipates fiscal Q3 revenue to be a record $33.5 billion, with gross margin around 81% [30] Other Important Information - Micron achieved a record free cash flow of $6.9 billion in fiscal Q2, with a net cash position of $6.5 billion [28] - The board approved a 30% increase in the quarterly dividend to $0.15 per share [29] Q&A Session Summary Question: Sustainability of gross margins with HBM4 - Management indicated that gross margins are expected to remain strong due to AI driving a multi-year investment cycle, with tight market conditions expected to persist beyond 2026 [36][38] Question: Details on the SCA - Management confirmed that SCAs are multi-year agreements aimed at providing stability and visibility, but specifics remain confidential [39][41] Question: Allocation of supply among end markets - Management acknowledged tight supply across all end markets, with a focus on maintaining a diversified supply strategy while prioritizing data center demand [46][48] Question: Future cash allocation plans - Management emphasized the importance of balance sheet strength and organic investment, with plans for share repurchases and increased dividends reflecting confidence in future cash flows [56][58]

Financial Data and Key Metrics Changes - Revenue for Q1 was CAD 178.3 million, up 25% year-over-year, marking the fastest growth in 10 quarters and a 9% sequential increase [6][26] - Adjusted EBITDA was CAD 11.5 million, up 62% year-over-year, representing the fastest growth in 2 years [7][28] - Free Cash Flow for Q1 was CAD 2.9 million, a significant improvement from -CAD 1.9 million in Q1 last year and more than double the CAD 1.3 million generated in Q4 [10][28] Business Line Data and Key Metrics Changes - The domestic core brick-and-mortar segment generated CAD 150 million in revenue, achieving a CAD 600 million annual run rate, with gross margins reaching 28%, the highest in over three years [12][27] - The Remexian international business generated EUR 25 million in revenue for Q1, averaging over EUR 8 million a month, with February alone contributing EUR 12 million [8][41] - The Canna Cabana loyalty program saw membership grow to 2.58 million, up 47% year-over-year, with Elite members increasing by 100% year-over-year to 162,000 [11][29] Market Data and Key Metrics Changes - Market share in the five provinces where the company operates increased to 12% in November and December, up from 11% a year ago [13] - Total industry sales in the five provinces were up 3% year-over-year, while Canna Cabana sales increased by 14% during the same period [15][16] - The average annual revenue per square foot for Canna Cabana was CAD 1,728, significantly above the peer average of CAD 1.3 million [14] Company Strategy and Development Direction - The company plans to add 20-30 stores in Canada during the calendar year, focusing primarily on Ontario, while also exploring M&A opportunities [17][48] - Long-term goals include increasing sales from white label products to approximately 20% from the current 1.6% [17] - The company aims to expand its ecosystem into other international markets, particularly the U.K., within the next twelve months [23][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a slowing market in Canada but expressed confidence in outperforming competitors due to strong execution and strategic location choices [36][68] - The company remains optimistic about the Remexian business, anticipating improved profitability as Canadian biomass begins to arrive in Germany [9][44] - Management highlighted strong cost controls, with general and administrative expenses at a six-quarter low of 4.1% of revenue [23] Other Important Information - The company generated CAD 42.6 million in Adjusted EBITDA over the past 12 months, indicating strong profitability [24] - New advisory positions were created to provide strategic guidance on various matters, including real estate and e-commerce technology [24] Q&A Session Summary Question: Impact of winter storms on same-store sales - Management confirmed that same-store sales were impacted in late January but still posted a 2% increase in the last three months of 2025, outperforming the industry [34][36] Question: Plans for entering the U.K. market - Management is actively meeting with key players in the U.K. and aims to enter the market within the next 12 months, with no rush to finalize a deal [37][38] Question: February sales performance in Germany - Management noted that February's sales of EUR 12 million were the highest since acquiring Remexian, but cautioned that this level may not be sustainable in the short term [41][43] Question: Future store openings and market focus - Management indicated that while the focus is on Ontario, growth opportunities exist in Alberta and Saskatchewan as well [48] Question: E-commerce recovery strategies - Management implemented several changes in the e-commerce segment, resulting in a 30%-50% increase in conversion rates and a positive trend continuing into Q2 [56][58]