Financial Data and Key Metrics Changes - The company generated a record $308 million in revenue for fiscal year 2026, representing approximately 26% year-over-year growth [8] - Non-GAAP gross margin was 59% for the year, with adjusted EBITDA profit of $15.5 million and free cash flow of $53 million, marking the first full fiscal year of non-GAAP profitability [8][24] - Q4 revenue reached $86.8 million, reflecting approximately 41% year-over-year growth, and marked the fifth consecutive quarter of adjusted EBITDA profitability [21][24] Business Line Data and Key Metrics Changes - Defense and intelligence revenue grew over 50% year-over-year, driven by strong performance in data subscriptions and satellite services [9][21] - Civil government revenue was flat year-over-year, while the commercial sector saw a modest decline, attributed to a focus on large government customers and headwinds in agriculture [21][12] - The backlog at the end of the period exceeded $900 million, representing approximately 79% growth year-on-year, providing visibility for future revenue growth [9][28] Market Data and Key Metrics Changes - Revenue growth was distributed globally, with approximately 41% growth in Asia Pacific, 48% in EMEA, 11% in North America, and a slight decline of about 2% in Latin America [22] - The end-of-period customer count was 897, slightly down sequentially, reflecting a strategic shift towards larger customer opportunities [22][23] Company Strategy and Development Direction - The company aims to leverage its strong position in satellite services and AI to capture significant market opportunities, particularly in defense and intelligence sectors [19][20] - Plans include doubling satellite manufacturing capacity and scaling the Pelican fleet, with multiple launches scheduled for the year [19][31] - The company is focused on executing current contracts while investing in technology and AI capabilities to drive future growth [19][30] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong demand signals, particularly in Europe, driven by geopolitical dynamics and the need for sovereign systems [47][48] - The company anticipates that AI will be transformational for its business, enabling broader applications and democratizing access to Earth intelligence [18][19] - Management expressed confidence in achieving revenue growth and maintaining positive free cash flow in fiscal year 2027, despite expected fluctuations [31][30] Other Important Information - The company is currently in a growth capital expenditure investment cycle, with approximately $81.5 million in capital expenditures for FY 2026 [26][27] - The company has expanded its technology collaboration with NVIDIA to enhance data processing capabilities [17] Q&A Session Summary Question: Update on Suncatcher opportunity and NVIDIA partnership - Management indicated that both projects are in early stages, with Suncatcher focused on tech demos and NVIDIA enhancing data processing capabilities [36][38] Question: Strength in European market - Management noted high demand in Europe, driven by geopolitical factors, and emphasized the company's ability to provide rapid and sovereign satellite solutions [47][48] Question: AI partnership status - Management discussed ongoing research collaborations aimed at developing AI-enabled solutions, with a focus on unlocking broader market potential [58][59] Question: Impact of Middle East conflict on demand - Management acknowledged increased urgency for data in conflict zones but stated that there were no material changes in customer behavior [70][95] Question: Backlog strength vs. revenue guidance - Management explained that while backlog is strong, guidance is conservative to account for execution risks and timing of large contracts [90][92]

Financial Data and Key Metrics Changes - Revenue for 2025 was $386.2 million, an increase of $132.7 million or 52% year-over-year, primarily driven by increased completion against two transport layer Tranche 2 contracts [23][24] - Gross margin percentage improved to 20%, up 7 percentage points year-on-year, due to a better mix of newer programs and a reduction in negative estimate at completion (EAC) adjustments [24] - Contribution margin in 2025 was 32%, an increase of 2 percentage points from 2024's 30%, with contribution margin dollars growing by $47 million to $122 million, a 63% increase [27][28] Business Line Data and Key Metrics Changes - The company launched 23 satellites in 2025, emerging as a leading provider for the Department of Defense's Proliferated Warfighter Space Architecture [9][10] - The introduction of the M-CLASS platform in 2025, which supports payloads over 8 kW, broadens the addressable market across national security, civil, and commercial sectors [12] - A $187 million commercial contract for a 20+ satellite constellation was finalized, marking the fifth commercial contract for the company [12] Market Data and Key Metrics Changes - The company reported a total of 33 satellites currently on orbit, with plans to have 140 satellites by the end of 2027 [21][65] - The identified pipeline for future contracts stands at $11 billion, indicating strong demand in both national defense and commercial sectors [72] - The government is accelerating investments in space domain awareness and missile defense, reflecting a deteriorating global threat environment [19] Company Strategy and Development Direction - The company aims to disrupt the traditional space industry by transforming satellite manufacturing and operations into a fully industrialized model [6][8] - Recent acquisitions, including ATLAS Space Operations and Orbion Space Technology, are part of a strategy to integrate critical mission capabilities and reduce supply chain risks [13][17] - The company plans to leverage its IPO proceeds to grow its total addressable market (TAM) through mergers and acquisitions and expand its manufacturing capabilities [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitability in 2026, supported by a strong backlog and anticipated government contract awards [5][29] - The company is well-positioned to meet the evolving needs of U.S. government and commercial customers, with a focus on delivering at scale [22] - Management highlighted the importance of communication and coordination in future defense architectures, emphasizing the need for integrated systems [50] Other Important Information - The company had cash and cash equivalents of $162.6 million as of December 31, 2025, with total liquidity reaching $895.2 million post-IPO [25][26] - Capital expenditures for 2025 were $8.9 million, significantly lower than $18 million in 2024, reflecting efficient manufacturing processes [28] Q&A Session Summary Question: Can you elaborate on the acquisition of Orbion? - The acquisition of Orbion was anticipated in the S-1 filing and is expected to enhance the company's technology roadmap and production capabilities [31][32] Question: What is the expected revenue contribution from Orbion? - Specific revenue guidance for Orbion is not provided, but it is included in the consolidated guidance figure [34][35] Question: What are the prospects for new business opportunities? - Management is optimistic about new contracts, particularly in national defense, with two IDIQ contracts already won for classified customers [40][41] Question: How does the company view the PWSA architecture? - The company believes the PWSA architecture is critical for future U.S. defense and is moving towards a more coordinated approach [49][50] Question: What is the current production capacity? - The company has invested heavily in production capacity, with the ability to produce up to 1,000 satellites a year, ensuring readiness for future demand [62][63]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $22.2 million, within guidance range, with subscription revenue representing approximately 93% of total revenue for the full year [68][70] - Annual Recurring Revenue (ARR) at year-end for 2025 was $84.1 million, down from $107.5 million at the end of 2024, largely due to strategic divestitures [73][74] - GAAP net loss for Q4 was $22.9 million, including a non-cash goodwill impairment charge of $12.4 million [70] - Adjusted EBITDA for Q4 was $2.5 million, marking the 10th consecutive positive quarter for this metric [71] - Full year 2025 adjusted EBITDA totaled $10.3 million, with an adjusted EBITDA margin of 10.8%, up from 8.1% in 2024 [81][82] Business Line Data and Key Metrics Changes - The company completed the migration of customers from the legacy FiscalNote platform to the new PolicyNote platform, achieving a 235% increase in multi-year contracts among private sector customers [71][72] - The sales development efficiency doubled due to the integration of AI technology into daily workflows [72] Market Data and Key Metrics Changes - The prediction market volume in the U.S. expanded from approximately $9 billion in 2024 to roughly $44 billion in 2025, indicating a four-fold increase [52] - Current trends suggest the prediction market could approach a $150 billion annualized run rate in 2026 [52] Company Strategy and Development Direction - The company is focusing on driving adoption and deeper engagement with the PolicyNote platform, delivering proprietary datasets in new ways, and exploring new markets including prediction platforms and agentic APIs [85][86] - A significant workforce transformation program is being rolled out to enhance operational discipline and leverage AI for streamlining internal operations [86] - The company aims to achieve adjusted EBITDA margins exceeding 20% and generate positive free cash flow by the end of Q1 2027 [87][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive growth through a product-led approach and transition to usage-based pricing models [116] - The company is optimistic about the engagement levels on the PolicyNote platform and expects to see improved retention as customers become more accustomed to the platform [115] Other Important Information - The company has divested several non-core assets, generating $144.9 million in gross cash proceeds, which aligns with its strategy to simplify operations and focus on core business [73][74] - The company is exploring both consumption-based pricing models and hybrid structures to maintain pricing integrity across delivery models [49] Q&A Session Summary Question: Are gross margins sustainable? - Management indicated that technology is helping drive incremental savings, and they expect margin improvement to be driven by higher gross margins over time [95] Question: Any incremental savings from migrating all customers to PolicyNote? - Management confirmed that additional cost savings will come from deprecating the legacy platform's backend, which is included in the operating plan for the year [97] Question: Insights on enterprise versus government versus NGO pipeline health? - Management noted that agentic AI presents a significant opportunity across all sectors, with good success in mid-market and public sector after a rough 2025 [99] Question: Details on enterprise customers that chose not to migrate to PolicyNote? - Management explained that some large enterprises made decisions before migration timelines, influenced by macroeconomic factors [114] Question: Confidence in driving growth with a product-led approach? - Management expressed strong confidence in the value of their data and the potential for new consumption models, including volume-based and hybrid pricing [116]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $22.2 million, within guidance range, with full year 2025 revenue at $95.4 million compared to $120.3 million in 2024 [39][43] - Annual recurring revenue (ARR) at year-end for 2025 was $84.1 million, down from $107.5 million in 2024, primarily due to strategic divestitures [43][44] - Adjusted EBITDA for Q4 was $2.5 million, marking the 10th consecutive positive quarter for this metric, with full year adjusted EBITDA totaling $10.3 million, up from $8.1 million in 2024 [42][49] Business Line Data and Key Metrics Changes - Subscription revenue represented approximately 93% of total revenue for the full year, reinforcing the predictability of the recurring revenue model [40][44] - The sales team increased the share of multi-year contracts among private sector customers from 17% to 40%, a 235% increase year-over-year [42] Market Data and Key Metrics Changes - The prediction market volume in the U.S. expanded from approximately $9 billion in 2024 to roughly $44 billion in 2025, indicating a four-fold increase [30] - Current trends suggest the prediction market could approach a $150 billion annualized run rate in 2026, reflecting significant growth potential [30] Company Strategy and Development Direction - The company is focusing on driving adoption and deeper engagement with the PolicyNote platform, delivering proprietary datasets in new ways, and exploring new markets including prediction platforms and agentic APIs [51] - A workforce transformation plan is being implemented to reduce cash operating expenses by over 19%, with a headcount reduction of approximately 25% year-over-year [8][51] - The company aims to achieve adjusted EBITDA margins exceeding 20% and generate positive free cash flow by the end of Q1 2027 [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow more efficiently as customer consumption models evolve, positioning FiscalNote to take advantage of new growth opportunities [15][36] - The transition to the PolicyNote platform is expected to drive improved retention and stronger customer engagement over time, despite some initial headwinds [21][74] Other Important Information - The company has eliminated over $35 million in annual cash operating expenses over the past three years through strategic focus and operational discipline [8] - The launch of PolicyNote has shown strong usage metrics, with key activity adoption and frequency of use higher compared to the legacy platform [19] Q&A Session Summary Question: Are gross margins sustainable? - Management indicated that technology is helping drive incremental savings, and they expect margin improvement to be driven by higher gross margins over time [57] Question: Any incremental savings from migrating all customers to PolicyNote? - Management confirmed that additional cost savings will come from deprecation of the legacy platform's backend, which is included in the operating plan for the year [59] Question: Insights on enterprise versus government versus NGO pipeline health? - Management noted good success in mid-market and public sector, with expectations for continued growth driven by agentic AI capabilities [61] Question: Update on prediction market opportunities? - Management confirmed that content generation around prediction markets is being developed, with expectations for higher engagement and potential transactional revenue [64] Question: Insights on enterprise customers that chose not to migrate? - Management explained that some large enterprises made decisions before migration timelines, influenced by macroeconomic factors, but engagement levels on PolicyNote remain high [73]

Financial Data and Key Metrics Changes - The company reported a record revenue of $27.5 million for 2025, reflecting an 87% year-over-year increase, driven by the acquisition of Camarillo and higher revenues from new campuses [6][9] - Operating expenses increased to nearly $28 million, primarily due to the rise in campus operations and the number of ground leases [6][9] - The company achieved positive cash flow from operations for the first time, largely due to a $5.9 million rent realization from a lease extension [8][35] - Adjusted EBITDA improved for the third consecutive quarter, reaching a negative EBITDA of approximately $1 million in Q4 [11] Business Line Data and Key Metrics Changes - Revenues for the wholly-owned subsidiary, Sky Harbour Capital, increased by 49% year-over-year, with an 18% sequential increase in Q4 [9] - The company expects moderate revenue increases in Q1 2025, followed by a significant step-up in Q2 and Q3 2027 due to the opening of phase II in Miami [9] Market Data and Key Metrics Changes - The company is experiencing a fundamental supply-demand mismatch in the airport market, with a 22% average markup on lease renewals, indicating strong demand for airport space [19] - The average rent for pre-leasing campuses is higher than that for stabilized and initial lease-up campuses, reflecting improved targeting of better airports [61] Company Strategy and Development Direction - The company aims to achieve higher efficiencies at the campus level in 2026, particularly as it opens second phases in Miami and Dallas [7] - The focus for 2026 will be on maximizing net operating income (NOI) capture and expanding in the best geographies [46] - The company is refining its guidance metrics to focus on total available NOI rather than just the number of airports [38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about reaching breakeven cash flows in 2026, with expectations for revenue growth following campus openings and lease rate increases [54] - The company is preparing for a significant surge in development activity, with a focus on operational efficiency and cost reduction [39][44] Other Important Information - The company finalized a five-year tax-exempt drawdown facility with JPMorgan to fund upcoming projects, enhancing its liquidity position [30][35] - The company is exploring the sale of hangars as a means to generate capital, particularly for tenants who prefer ownership over leasing [73] Q&A Session Summary Question: Should we be expecting the signing of any new ground leases in 2026? - Management confirmed that new ground leases are expected, with guidance to be provided in the next earnings call [53] Question: Will the company be breakeven going forward from here? - Management indicated that cash flows follow revenues, and with upcoming campus openings, they expect to move north from breakeven in Q2 2026 [54][55] Question: How can we think about construction spend ramping as we move throughout 2026 and beyond? - Management noted that construction expenditures are ramping up, with strong liquidity and a new subsidiary for in-house construction management [56] Question: What are the expectations for stabilization across the three assets delivered in 2025? - Management expects stabilization for the three assets in the coming two quarters, with a new lease-up strategy in place [58][59] Question: How many additional ground leases do you expect in 2026? - Management reiterated that guidance will focus on NOI generation rather than the number of ground leases [60] Question: Why is the average rent at pre-leasing campuses higher than stabilized and initial lease-up campuses? - Management explained that improved targeting of better airports has led to higher rents for pre-leased campuses [61] Question: Can you explain the unit economic slide more? - Management clarified that the illustration of $36 NOI per square foot is based on current leasing trends, with expectations for higher rents in new campuses [65][66] Question: Can you provide details on your interest in selling hangars? - Management stated that they are open to selling hangars if it makes financial sense, particularly for long-term prepaid leases [73][74]

Financial Data and Key Metrics Changes - Revenue for 2025 was $386.2 million, an increase of $132.7 million or 52% year-over-year [23][24] - Gross margin percentage improved to 20%, up 7 percentage points year-on-year, driven by a better mix of newer programs [24] - Contribution margin in 2025 was 32%, an increase of 2 percentage points from 2024's 30% [27] - Adjusted EBITDA improved from -$4 million in 2024 to -$1.4 million in 2025 [28] Business Line Data and Key Metrics Changes - The company launched 23 satellites in 2025, establishing itself as a leading provider for the Department of Defense's Proliferated Warfighter Space Architecture [8][10] - A new commercial contract worth $187 million for a 20+ satellite constellation was finalized in 2025, marking the fifth commercial contract for the company [12] Market Data and Key Metrics Changes - The company reported a total of 33 satellites currently on orbit and expects to have 140 satellites by the end of 2027 [21][68] - The identified pipeline for future contracts stands at $11 billion, indicating strong demand in the market [73] Company Strategy and Development Direction - The company aims to disrupt the traditional space industry by transforming satellite manufacturing and operations into a fully industrialized model [6][10] - Recent acquisitions, including ATLAS Space Operations and Orbion Space Technology, are part of a strategy to integrate critical mission capabilities and reduce supply chain risks [13][17] - The company is focused on expanding its market share across national security, civil, and commercial sectors [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growing demand for space capabilities, particularly in national defense, and the need for rapid execution of contracts [19][41] - The company anticipates revenue for 2026 to be in the range of $545 million to $595 million, with over 70% expected from existing backlog [29][85] Other Important Information - The company completed its IPO on January 30, 2026, raising net proceeds of $582.6 million, which enhances its operational flexibility [25][26] - The company has a strong liquidity position with total liquidity of $895.2 million as of January 31, 2026 [25] Q&A Session Summary Question: Can you elaborate on the acquisition of Orbion? - Management confirmed that the acquisition was anticipated in the S-1 filing and highlighted Orbion's strong performance and alignment with the company's technology roadmap [31][32] Question: What is the expected revenue contribution from Orbion this year? - Management stated that specific revenue guidance for Orbion is not being issued but confirmed it is included in consolidated guidance figures [34][36] Question: What are the prospects for new business in 2026? - Management expressed optimism about new contracts, particularly in national defense, and mentioned winning two IDIQ contracts for classified customers [41][43] Question: How does the company view the PWSA architecture? - Management indicated that the government is moving towards a coordinated architecture for national defense, emphasizing the critical need for communication systems [52][54] Question: What is the current build rate and production capacity? - Management stated that the company has invested heavily in production capacity, with the ability to produce up to 1,000 satellites a year, ensuring readiness for future demand [66][68]

Financial Data and Key Metrics Changes - For Q4 2025, net income attributable to common stockholders was $1.6 million or $0.06 per diluted share, down from $4.5 million or $0.17 per diluted share in Q4 2024 [21] - Revenues increased by 8% to $23.3 million compared to $21.6 million in the same quarter last year [21] - Adjusted EBITDA for the quarter was $11.4 million, an increase of 9% from $10.5 million in the prior period [21] Business Line Data and Key Metrics Changes - Commercial and industrial real estate generated $4.2 million in revenue for the quarter, up from $4.1 million in the prior year [22] - Farming revenues for the quarter were $12.2 million, a 26% increase compared to $9.7 million in Q4 2024, attributed to a strong pistachio harvest [23] - Income from joint ventures decreased to $2.1 million in Q4 from $3.3 million in the prior year, primarily due to lower earnings from the Travel Center joint venture [23] Market Data and Key Metrics Changes - The outlets in Tejon saw the highest retail sales in December since opening in 2014, positively impacted by the new Hard Rock Casino Tejon [11] - The industrial portfolio remains fully leased, while the commercial portfolio is approximately 98% leased, including 93% occupancy at the outlets [22] Company Strategy and Development Direction - The company aims to strengthen its core business, tighten its cost structure, and leverage assets to generate recurring cash flow [28] - A new reporting segment for multifamily revenues and expenses has been introduced, reflecting leasing activity at Terra Vista at Tejon [25] - The company is committed to advancing development initiatives while maintaining balance sheet discipline [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the need to convert more assets into cash flow production and emphasizes urgency in achieving this goal [64] - The company is actively working on governance reforms, including reducing board size and enhancing shareholder engagement [12][14] - Confidence in advancing the Centennial development to approval is high, with a strong relationship with L.A. County noted [78] Other Important Information - The company plans to hold its annual meeting on-site at the ranch on May 13, providing opportunities for shareholders to engage with management [15] - Cost-saving measures have been implemented, with an additional $1 million targeted by the end of 2027 [17] Q&A Session All Questions and Answers Question: When will management respect and benefit all shareholders? - Management acknowledges the sentiment and frustration, highlighting efforts to reduce costs and improve shareholder engagement [32][34] Question: How is Tejon Ranch approaching wildlife-friendly rodent control methods? - Management emphasizes an integrated approach to wildlife management, focusing on prevention and habitat management [43] Question: How will the company grow returns on invested capital while holding onto Mountain Village and Centennial? - Management aims to move communities into active implementation to generate cash flow and is exploring third-party joint venture equity [49][50] Question: What is the status of monetizing Mountain Village and Centennial? - Management confirms ongoing capital raising efforts and is open to discussions regarding land utilization [52] Question: How will the company achieve sustainable returns on investment? - Management acknowledges the need to convert assets into cash flow and is focused on improving bottom-line performance across existing assets [65] Question: Will there be an investor day at the company headquarters? - Management confirms plans for an annual meeting at the ranch, allowing for property tours and direct engagement with shareholders [71] Question: How much funding is needed for Centennial and Mountain Village? - Management has not disclosed future development costs but plans to use third-party joint venture equity to minimize shareholder dilution [75] Question: What level of confidence is there for Los Angeles County to approve the Centennial development? - Management expresses high confidence in advancing Centennial to approval, citing a strong relationship with L.A. County [78]

Financial Data and Key Metrics Changes - The company generated a record $308 million in revenue for fiscal year 2026, representing approximately 26% year-over-year growth [8][21] - Non-GAAP gross margin was 59% for the year, slightly down from 60% in fiscal year 2025 [24] - Adjusted EBITDA profit was $15.5 million for fiscal year 2026, marking the first year of delivering Adjusted EBITDA profitability on an annual basis [25][27] - Free cash flow was $53 million, representing the first full fiscal year of positive free cash flow [8][27] - Q4 revenue reached $86.8 million, reflecting approximately 41% year-over-year growth [21] Business Line Data and Key Metrics Changes - Defense and intelligence revenue grew over 50% year-over-year, driven by strong performance in data subscriptions and satellite services [9][21] - Civil government revenue was flat year-over-year, impacted by the end of a contract with Norway [21] - Commercial sector revenue declined modestly year-over-year, attributed to a focus on large government customers and headwinds in agriculture [12][21] Market Data and Key Metrics Changes - Revenue growth was distributed globally, with approximately 41% growth in Asia Pacific, 48% in EMEA, 11% in North America, and a decline of about 2% in Latin America [22] - The end-of-period customer count was 897, slightly down sequentially, reflecting a shift to focus on larger customer opportunities [22][23] Company Strategy and Development Direction - The company aims to leverage its strong backlog of over $900 million, which grew approximately 79% year-over-year, to accelerate revenue growth [9][28] - There is a strong focus on expanding satellite manufacturing capacity and investing in AI-enabled solutions to meet market demand [19][31] - The company is committed to maintaining a balance between growth and profitability, targeting Rule of 40 for fiscal year 2027 [30] Management's Comments on Operating Environment and Future Outlook - Management highlighted the transformational year of 2026, with significant progress in satellite services and AI partnerships [7][20] - The geopolitical landscape is driving demand for defense and intelligence solutions, with a focus on sustainability and security [9][10] - The company anticipates strong demand for AI-based solutions across various sectors, including agriculture, insurance, and finance [18][19] Other Important Information - The company plans to discontinue monitoring customer count as a key metric, focusing instead on annual contract value (ACV) retention rates [23] - Capital expenditures for fiscal year 2026 were approximately $81.5 million, with a focus on growth investments [27][31] Q&A Session Summary Question: Update on Suncatcher opportunity and NVIDIA partnership - Management indicated that both projects are in early stages, with Suncatcher focused on tech demos and NVIDIA collaboration aimed at enhancing data processing capabilities [35][36][39] Question: Strength in European market - Management noted high demand in Europe driven by geopolitical dynamics, emphasizing the need for sovereign systems and quick access to satellite data [46][47][49] Question: AI partnerships and bottlenecks - Management discussed the potential of AI to unlock new markets and emphasized the importance of real-world data for model training [58][66] Question: Impact of Middle East conflict on demand - Management acknowledged increased urgency for data in conflict situations but stated that there were no material changes in customer behavior [70][95] Question: Backlog strength vs. revenue guidance - Management explained that while backlog is strong, guidance is conservative to account for execution risks and timing of large contracts [90][92]

Financial Data and Key Metrics Changes - The company reported a record revenue of $27.5 million for 2025, reflecting an 87% year-over-year increase, driven by the acquisition of Camarillo and higher revenues from new campuses [6][9] - Operating expenses increased to nearly $28 million, primarily due to the rise in campus operations and the number of ground leases [6][9] - The company achieved positive cash flow from operations for the first time, largely due to a $5.9 million rent realization from a lease extension [8][36] - Adjusted EBITDA improved for the third consecutive quarter, reaching a negative EBITDA of approximately $1 million in Q4 [11] Business Line Data and Key Metrics Changes - Revenues for the wholly-owned subsidiary, Sky Harbour Capital, increased by 49% year-over-year, with an 18% sequential increase in Q4 [9] - The company expects moderate revenue increases in Q1 2025, followed by a significant step-up in Q2 and Q3 2027 due to the opening of phase two in Miami [9] Market Data and Key Metrics Changes - The company is experiencing a fundamental supply-demand mismatch in the airport market, with an average markup of 22% on lease renewals, indicating strong demand [19] - The company is targeting better airports for future developments, which is expected to lead to higher rents and NOI revenues per square foot [66] Company Strategy and Development Direction - The company aims to achieve higher efficiencies at the campus level in 2026, particularly as it opens second phases in Miami and Dallas [7] - The focus for 2026 will be on maximizing NOI capture and expanding in the best geographies, with a strategic emphasis on same metro center expansion [47][48] - The company is refining its guidance metrics to focus on total available NOI rather than just the number of airports [38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about reaching breakeven cash flows in 2026, with expectations for revenue growth following campus openings and lease rate increases [54] - The company is preparing for a significant surge in development activity, with a focus on operational efficiency and cost reduction [39][44] - Management acknowledged the competitive landscape but emphasized the company's unique positioning and strategy to capture prime airport locations [46] Other Important Information - The company has secured a 5-year tax-exempt drawdown facility with JPMorgan to fund upcoming projects, enhancing its liquidity position [30][35] - The company is exploring potential sales of hangars to generate capital, particularly for tenants interested in long-term leases [73][77] Q&A Session Summary Question: Should we be expecting the signing of any new ground leases in 2026? - Yes, guidance will be provided in the next earnings call, focusing on NOI capture rather than the number of airports [53] Question: How should we think about breakeven in 2026? - Cash flows will follow revenues, with expectations to move north from breakeven in Q2 as new campuses open [54][55] Question: How can we think about construction spend ramping in 2026? - Construction expenditures are expected to accelerate as the company has raised capital and completed onboarding for in-house construction management [56][57] Question: What are the expectations for stabilization across the three assets delivered in 2025? - Stabilization is expected within the next two quarters, with a new lease-up strategy in place [58][59] Question: How many additional ground leases do you expect in 2026? - Formal guidance will be provided in the next earnings call, focusing on NOI generation [60] Question: Why is the average rent at pre-leasing campuses higher than stabilized campuses? - The company is targeting better airports now, leading to higher rents in pre-leasing compared to existing campuses [61][66] Question: Can you explain the unit economic slide more? - The illustration suggests that rents and NOI revenues per square foot are likely to trend higher in new campuses compared to previous ones [66] Question: What is the actual IRR or yield on cost expected? - The yield on cost is expected to be lower initially due to past challenges, but higher rents are anticipated to improve returns over time [70][72] Question: Can you provide details on your interest in selling hangars? - The company is open to selling hangars if it makes financial sense, particularly for tenants preferring ownership over leasing [73][77]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $22.2 million, within guidance range, with full-year revenue at $95.4 million compared to $120.3 million in 2024 [37][41] - Annual recurring revenue (ARR) at year-end 2025 was $84.1 million, down from $107.5 million in 2024, primarily due to strategic divestitures [41][42] - Adjusted EBITDA for Q4 was $2.5 million, marking the 10th consecutive positive quarter for this metric, with full-year adjusted EBITDA totaling $10.3 million, up from $8.1 million in 2024 [39][46] Business Line Data and Key Metrics Changes - Subscription revenue represented approximately 93% of total revenue for the full year, reinforcing the predictability of the recurring revenue model [38] - The sales team increased the share of multi-year contracts among private sector customers from 17% to 40%, a 235% increase year-over-year [40] Market Data and Key Metrics Changes - The prediction market volume in the U.S. expanded from approximately $9 billion in 2024 to roughly $44 billion in 2025, indicating a four-fold increase [28] - The company is positioned to leverage its data and expertise in the rapidly growing prediction market, which could approach a $150 billion annualized run rate in 2026 [28][29] Company Strategy and Development Direction - The company is focusing on driving adoption of the PolicyNote platform and expanding API offerings to enhance product-led growth [11][49] - A workforce transformation plan is being implemented to reduce cash operating expenses by over 19%, including a 25% reduction in headcount [6][8] - The company aims to achieve positive free cash flow by the end of Q1 2027, supported by operational efficiencies and margin improvements [49][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow more efficiently as customer consumption models evolve, particularly through the use of AI [14][35] - The company anticipates continued progress in 2026, with a forecasted GAAP revenue range of $80-$83 million and adjusted EBITDA of $14-$16 million [49][50] Other Important Information - The company has completed significant divestitures, generating $144.9 million in gross cash proceeds, which aligns with its strategy to simplify operations and focus on core business [42] - The transition to the PolicyNote platform is expected to enhance customer engagement and retention over time [19][70] Q&A Session Summary Question: Are gross margins sustainable? - Management indicated that technology is helping drive incremental savings, suggesting potential for margin improvement over time [54] Question: Any incremental savings from migrating all customers to PolicyNote? - Management confirmed that additional cost savings will come from deprecating the legacy platform's backend, which is included in the operating plan [56] Question: Insights on enterprise versus government versus NGO pipeline health? - Management noted good success in mid-market and public sector, with expectations for growth driven by agentic AI capabilities [58] Question: Details on enterprise customers that chose not to migrate to PolicyNote? - Management explained that some large enterprises made decisions before migration timelines, influenced by macroeconomic factors [65][69] Question: Confidence in driving growth with a product-led approach? - Management expressed strong confidence in the ability to maintain pricing integrity and drive revenue growth through enhanced data accessibility [71]