Nike (NYSE:NKE) Q3 2026 Earnings call March 31, 2026 05:00 PM ET Speaker8Good afternoon, everyone, and welcome to Nike, Inc.'s third quarter fiscal 2026 conference call. For those who want to reference today's press release, you'll find it at investors.nike.com. Leading today's call is Paul Trussell, VP of Corporate Finance and Treasurer. I'd now like to turn the call over to Paul Trussell.Speaker9Thank you, operator. Hello, everyone, and thank you for joining us today to discuss Nike, Inc.'s third quarter ...

Financial Data and Key Metrics Changes - In 2025, RH achieved revenue growth of 8% and two-year growth of 15%, significantly outpacing furniture industry peers by 8-30 points [2] - Adjusted EBITDA reached $597 million, or 17.3% of revenues, compared to $539 million, or 16.9% of revenues in 2024 [2] - Free cash flow improved to $252 million from negative free cash flow of $214 million in 2024, marking an increase of $466 million year-over-year [2] Business Line Data and Key Metrics Changes - The company invested $289 million in adjusted CapEx for global expansion and an additional $37 million for acquiring brands to support the launch of RH Estates [3] - RH Estates will introduce RH Bespoke Furniture and RH Couture Upholstery, targeting the traditional market where RH is currently under-penetrated [5][6] Market Data and Key Metrics Changes - 60% of luxury homes feature classic or traditional architecture, influencing furniture purchasing behavior [5] - The company anticipates significant growth in the luxury home furnishings market due to increased spending by high and ultra-high net worth consumers [16] Company Strategy and Development Direction - RH aims to position itself as the arbiter of taste for the home, focusing on scaling taste and building a globally admired brand [3][4] - The company is developing a unique physical-first global ecosystem that integrates inspiring spaces with hospitality experiences [7][9] - RH plans to expand its presence in 27 existing markets and open new design concepts in 48 new markets across North America, representing a $2 billion opportunity [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledges current market challenges but believes the brand is positioned to thrive amid external difficulties [1][15] - The company expects revenue growth in the range of 4%-8% for 2026, accelerating to 10%-12% in 2027, with long-term targets of $5.4 billion-$5.8 billion by 2030 [14] - Management emphasizes the importance of a long-term view for investors, especially during peak investment periods [22] Other Important Information - RH is one of only seven globally owned luxury restaurant brands with 20 or more locations worldwide, with plans to increase to 40 by the end of 2027 [11] - The company is developing new gallery concepts, including RH Design Compounds and design ecosystems, to enhance capital efficiency and speed of expansion [12] Q&A Session Summary Question: Demand signals from the consumer and margin pressures - Management indicated that margin pressures are related to investment cadence and external factors like tariffs, rather than demand [20] Question: Executive leadership changes and their implications - Management expressed confidence in the new hires, emphasizing their experience and potential to enhance the company's real estate strategy and manufacturing capabilities [25][26] Question: Update on international strategy and revenue contribution - Management highlighted the importance of key cities like Paris, Milan, and London for brand awareness and long-term revenue growth, with expectations of significant contributions from these markets [34][36] Question: Asset sales and their timing - Management discussed plans for $250 million in asset sales each year, focusing on monetizing non-core assets and optimizing the balance sheet [43][44] Question: Scaling the RH Estates collection - Management outlined plans for a significant launch of RH Estates, with a focus on inventory and product rollout across key galleries [55] Question: Margin recovery and investment impacts - Management acknowledged that current margins are affected by peak investment cycles and external economic factors, but expressed confidence in future margin improvements as investments stabilize [74][75]

Financial Data and Key Metrics Changes - Total revenue for the full year 2025 was approximately $3.4 million, a decrease of about $1.3 million or 28% compared to $4.7 million in 2024, reflecting a strategic shift away from legacy contract work toward higher value commercial space-based and AI-driven solutions [23][24] - Cost of revenue was approximately $9.1 million, a 48% increase from $6.1 million in 2024, driven by increased depreciation and changing contract mix [24] - Gross loss for the year was approximately $5.7 million compared to a loss of about $1.5 million in 2024, reflecting increased depreciation and a transition away from high-margin contracts [24][27] - Net loss for the year was $29.5 million compared to $17.5 million in 2024, primarily due to strategic investments in infrastructure and personnel [27][28] - Adjusted EBITDA loss for 2025 was $17.3 million compared to $12.9 million in 2024, reflecting ongoing investment in scaling the platform [27] Business Line Data and Key Metrics Changes - The company launched three LizzieSat satellites between March 2024 and March 2025, demonstrating increasing capability across design, operations, and mission performance [6][8] - LizzieSat-1 completed its mission and established communications, while LizzieSat-2 remains in the commissioning phase [8][9] - LizzieSat-3 has completed full bus level commissioning and is now supporting recurring customer payload operations [9] Market Data and Key Metrics Changes - The geopolitical environment has shifted, underscoring the growing importance of space as a national security domain, which aligns with the company's focus on defense and commercial markets [5][12] - The company is actively engaged with both commercial and Department of Defense customers to address growing demand for cost-efficient satellite platforms [19] Company Strategy and Development Direction - The company aims to be a leading innovator in space and defense technologies, focusing on delivering cost-effective solutions for multi-domain operations [6][15] - The strategy includes a dual-use multi-mission model that creates diversified revenue streams and broadens customer opportunities [7][12] - The company is focused on accelerating commercialization and expanding in defense markets while reducing reliance on lower-margin contract manufacturing [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges recent stock performance concerns, attributing them to broader market conditions and the timing of revenue as the company transitions [30][31] - The company emphasizes execution, cost discipline, and innovation as key priorities moving forward [31][36] - Management is focused on improving capital efficiency and transitioning from build to revenue as commercialization scales [34][35] Other Important Information - The company completed multiple capital raises totaling approximately $53.3 million in net proceeds during 2025, entering 2026 with no outstanding term debt [28] - The company has built a full technology stack through organic development, maintaining a clean balance sheet and full control over intellectual property [16] Q&A Session Summary Question: Concerns about stock performance - Management recognizes concerns regarding stock performance, viewing it as a result of broader market conditions and the timing of revenue during the transition [30] Question: Future revenue streams and execution - Management emphasizes the importance of execution and the transition toward higher-margin, repeatable revenue streams as key objectives [31]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $0.4 million, up from $0.2 million in Q4 2024, representing a year-over-year increase of 100% [17] - Full-year total revenue reached $2.0 million, compared to $0.9 million in the previous year, marking a 129% increase [17] - Operating expenses for Q4 decreased to $4.5 million from $4.9 million year-over-year, while full-year operating expenses rose to $20.2 million from $15.6 million [17][18] - Net loss for Q4 was $4.0 million, an improvement from a net loss of $4.6 million in the same quarter last year [18][19] - Adjusted EBITDA loss for Q4 was $3.0 million, compared to a loss of $4.1 million in Q4 2024 [20] Business Line Data and Key Metrics Changes - The core business saw significant growth, with underlying revenue in Q4 more than doubling to $406 thousand from $200 thousand year-over-year [13] - Annual recurring revenue (ARR) as of Q4 was $1.8 million, up from $0.8 million in the same period last year [21] - Booked annual recurring revenue (BAR) for Q4 was $0.1 million, down from $7.1 million a year ago, primarily due to longer sales cycles [22][24] Market Data and Key Metrics Changes - The company is engaged in active conversations with top players across various industries, including financial services, technology, and healthcare, indicating strong market interest [5][6] - The company has a pipeline of over $30 million in active engagements with large enterprise accounts [14] Company Strategy and Development Direction - The company is focused on enhancing its technology and expanding partnerships, including a significant agreement with a major European retailer for a live production deployment of its PrivacyKey technology [7][8] - The launch of the authID Mandate Framework aims to address accountability issues related to AI agents, positioning the company as a leader in identity security [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market demand for identity solutions, noting that major enterprises are increasingly recognizing the need for robust identity verification systems [4][5] - Despite setbacks from earlier contracts, management believes the company is well-positioned for growth in 2026, with expectations of resuming RPO growth and closing additional enterprise deals [20][24] Other Important Information - The company was accepted into the NVIDIA Connect program, enhancing its capabilities in AI and machine learning [12] - The technology has received independent validation, being named Best Digital Trust Solution for ID Verification and Authentication at the 2025 PayTech Awards [10] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating that the focus was primarily on the presentation of results and strategic insights rather than a detailed Q&A session.

Financial Data and Key Metrics Changes - Venu's total assets grew to $370 million as of December 31, 2025, up $192 million or 108% from $178 million at December 31, 2024 [22] - Property and equipment increased to $305 million as of December 31, 2025, up 123% from $137 million at December 31, 2024 [22] - Total revenue was $17 million for the full year ended December 31, 2025, compared to $17.8 million for the full year ended December 31, 2024 [23] Business Line Data and Key Metrics Changes - Luxe FireSuite and Aikman Club sales reached $126 million for the full year ended December 31, 2025, representing a 62% increase over the $77 million generated in fiscal year 2024 [23] - The triple-net model launched mid-year 2025 accounted for approximately 25% of total fire suite sales for the year [23] Market Data and Key Metrics Changes - Amphitheater revenue grew 94% year-over-year due to a full season in 2025 compared to a partial season in 2024 [10] - The Ford Amphitheatre was named to Billboard's 2026 Top Music Venues list, enhancing its market recognition [10] Company Strategy and Development Direction - The company is focused on building partnerships with world-class operators and expanding its venue portfolio, targeting a total of 40 locations [17][36] - Venu is pursuing a more than just music strategy, including residencies and AI-driven programming to maximize revenue-generating capabilities [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting a strong demand for venues and a robust booking pipeline for the upcoming season [48][50] - The company is actively addressing operational challenges and refining its focus on high-potential venues [14] Other Important Information - Venu completed a $14 million sale-leaseback of its Colorado Springs parking property in Q4 2025, generating a development profit of $6.6 million [24] - The company has formed significant partnerships with brands like PepsiCo and Aramark, indicating strong market validation [17][20] Q&A Session Summary Question: Strategy to attract more institutional investors - Management acknowledged frustration with stock performance and outlined plans to enhance investor relations and attract more institutional investors [28][30] Question: Future market expansion plans - Management detailed ongoing negotiations in 13 markets and plans for strategic expansion in Colorado and Texas [36] Question: Clarification on asset valuation discrepancies - Management explained the gap between the balance sheet value and the appraised value of $1.24 billion, attributing it to municipality-contributed real estate being recorded at zero cost basis [40][43] Question: Outlook for event supply and bookings - Management indicated a strong uptick in bookings and demand for amphitheater events compared to the previous year, with expectations for a robust season ahead [48][50]

Financial Data and Key Metrics Changes - Venu's total assets grew to $370 million as of December 31, 2025, up $192 million or 108% from $178 million at December 31, 2024 [22] - Property and equipment increased to $305 million as of December 31, 2025, up 123% from $137 million at December 31, 2024 [22] - Luxe FireSuite and Aikman Club sales reached $126 million for the full year ended December 31, 2025, representing a 62% increase over the $77 million generated in fiscal year 2024 [23] - Total revenue was $17 million for the full year ended December 31, 2025, compared to $17.8 million for the full year ended December 31, 2024 [23] Business Line Data and Key Metrics Changes - Fire Suite sales hit $126 million, up 62% over last year, with the triple-net model representing 25% of total sales [7][23] - Amphitheater revenue grew 94% year-over-year due to a full season in 2025 compared to a partial season in 2024 [10] Market Data and Key Metrics Changes - The Ford Amphitheatre was named to Billboard's 2026 Top Music Venues list, indicating increased recognition and demand [10] - The company is targeting a fall 2026 opening for the Broken Arrow venue, with significant interest from artists and promoters [11] Company Strategy and Development Direction - The company is focused on building partnerships with major brands like PepsiCo and Aramark, which are seen as validation of its business model [17][20] - Venu is targeting to scale to a total of 40 potential locations, with active negotiations in 13 markets across several states [36] - The company is exploring AI-driven programming and diverse event offerings to maximize revenue-generating capabilities [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting a strong demand for venues and a robust booking pipeline for the upcoming season [48][50] - The company is committed to addressing the disconnect between its market cap and asset value, with plans to enhance investor relations [28][43] Other Important Information - The company completed a $14 million sale-leaseback of its Colorado Springs parking property, generating a development profit of $6.6 million [24] - The portfolio was independently appraised at $1.24 billion, reflecting a more complete picture of its value [5][22] Q&A Session Summary Question: Strategy to attract more institutional investors - Management is actively working to bring undervalued stock back to its rightful place and has developed an investor relations plan to engage institutions [28][30] Question: Future market expansion plans - The company is engaged in developing new locations in 13 markets and has formal RFPs out to 17 markets, focusing on strategic growth [36] Question: Clarification on asset valuation discrepancies - The disconnect in asset valuation is due to municipality-contributed real estate being recorded at zero cost basis, while appraisals reflect market value [43][44] Question: Outlook for event supply and bookings - There is a significant increase in demand for amphitheater shows, with nearly double the offers compared to last year, indicating a strong upcoming season [48][50]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $35.3 million, a year-over-year growth of approximately 142% compared to $14.6 million in Q4 2024, primarily driven by the inclusion of Markforged, which contributed $20.7 million [23] - Gross profit for Q4 was $17.6 million, with an adjusted gross margin of approximately 49.7%, compared to $5.3 million and 36.3% in the prior year quarter [24] - For the full year 2025, revenue was $102.4 million, representing approximately 77% year-over-year growth compared to $57.8 million in 2024 [26] Business Line Data and Key Metrics Changes - The composite and metal manufacturing platform gained momentum, particularly in defense-related applications, with strong engagements and deployments of systems like X7, FX10, and FX20 [9][10] - The SMT business was a significant contributor to Q4 and full-year results, expanding relationships with tier-one customers and driving demand in advanced communications and electronics [14] Market Data and Key Metrics Changes - Momentum was broad-based across advanced electronics, aerospace, automotive, defense, food and beverage, and next-generation computing infrastructure industries [6] - Tariff uncertainty eased, but cautious capital spending continued to create variability in certain sectors [7] Company Strategy and Development Direction - The company streamlined operations, reduced cash burn, and aligned resources around industries with the strongest long-term opportunities [4] - A focus on high-value industries and disciplined cost management is expected to drive growth in 2026 [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum and potential for 2026, highlighting improved execution and strategic customer engagement [5][32] - The company plans to provide a series of announcements regarding its strategic alternatives review process in Q2 2026 [16] Other Important Information - The company began reporting as a U.S. domestic issuer as of January 1, 2026, aligning its governance with U.S. market standards [17] - A material weakness in internal control over financial reporting was identified, but no errors in previously issued financial statements were found [19][20] Q&A Session Questions and Answers Question: Concerns about Markforged revenue comparison - Analyst questioned the revenue growth of Markforged and the overall revenue of Nano Dimension, suggesting it was misleading to highlight over 100% growth without clarifying the organic growth aspect [34] - Management clarified that the year-over-year comparison included consolidated results post-acquisition and emphasized sequential growth in Q4 over Q3 [35] Question: Share repurchase program discontinuation - Analyst inquired about the reasoning behind discontinuing the share repurchase program [37] - Management indicated that there are better uses for cash at this point, with further clarity expected in Q2 [38]

Financial Data and Key Metrics Changes - The company ended 2025 with cash and cash equivalents of approximately $10.8 million, following a significant capital raise of about $20 million during the year [22][23][30] - Total operating expenses for 2025 were approximately $23.3 million, slightly down from $23.8 million in 2024, with a notable reduction in general and administrative expenses [24][25] - The net loss for 2025 was approximately $22.6 million, or -$15.15 per share, compared to a net loss of approximately $24.6 million, or -$38.20 per share in 2024, indicating an improvement in the company's financial trajectory [26][27] Business Line Data and Key Metrics Changes - The company focused on three primary outputs from its AquaRefining process: battery-grade lithium carbonate, nickel-cobalt mixed hydroxide precipitate (MHP), and iron phosphate, which are expected to enhance commercial viability [6][8] - The successful production of lithium carbonate with fluorine levels under 30 parts per million sets a new benchmark for the recycling industry [7][8] - The company achieved a significant milestone by processing an entire metric ton of lithium iron phosphate (LFP) cathode scrap, recovering battery-grade lithium carbonate validated by OEM and third-party testing [9][10] Market Data and Key Metrics Changes - The overall market for black mass produced in North America is currently being exported offshore due to a lack of domestic refining options, presenting a significant opportunity for the company [45] - The pricing for lithium carbonate has recovered to approximately $20,000 per ton, improving the economic backdrop for domestic players in the battery recycling industry [46] Company Strategy and Development Direction - The company is intentionally designing its first commercial AquaRefining facility to be simpler, faster, and more capital-efficient, focusing on two core feedstock streams [5][6] - Strategic partnerships have been established, including a multi-year supply agreement with 6K Energy and MOUs with Impossible Metals and MOBY Robotics, extending the company's reach into critical minerals [16][17][50] - The company aims to build a domestic, closed-loop battery material supply chain, positioning itself at the center of the evolving market landscape [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to transition from validation to commercialization, highlighting the strong policy and geopolitical case for domestic battery material production [20][30] - The company remains focused on disciplined financial management, with no long-term debt and a commitment to maintaining adequate liquidity as it progresses towards its first commercial facility [22][30] Other Important Information - The company completed a CFO transition, bringing in Eric West, who has deep institutional knowledge and a fresh perspective [19] - The U.S. Patent Office granted allowance for a foundational patent covering key elements of the lithium battery recycling process, reinforcing the company's intellectual property position [19] Q&A Session Summary Question: What are the main areas of focus near term and the most natural areas of synergy for the Lion Energy acquisition? - Management is conducting thorough due diligence across financial, legal, operational, and commercial aspects, identifying synergies in battery materials and energy storage [32][33][34] Question: Can you provide a site selection update? - The company is actively evaluating two specific potential sites, focusing on feedstock access, logistics, and overall project economics [44] Question: What is the status of the feedstock market and its impact on the commercial position? - The company is pursuing opportunities in the black mass market, which is currently being exported, and believes its AquaRefining process positions it well for competitive payables [45][46] Question: Can you elaborate on the significance of the LFP breakthrough? - The ability to economically recover lithium and iron phosphate from LFP is crucial as LFP chemistry gains traction in energy storage and EVs, positioning the company as a leader in this segment [47] Question: How does the company view ongoing consolidation in the battery recycling industry? - Management sees consolidation as a net positive, as it differentiates the company from weaker models and aligns with its lower-cost, environmentally friendly AquaRefining process [52][53]

Financial Data and Key Metrics Changes - KULR recorded a net loss of approximately $62 million in 2025, primarily due to one-time and non-cash items, including a $14 million mark-to-market expense related to Bitcoin holdings [4][28] - Total revenue for 2025 was $16.1 million, representing a 51% increase from the previous year, driven mainly by Bitcoin mining and battery research grant dollars [7][28] - Battery platform revenue, which includes product sales and contract services, was $7.3 million in 2025, serving as the baseline for growth in 2026 [7][28] Business Line Data and Key Metrics Changes - Product revenue increased by 39%, while service revenue declined by 50% in 2025, indicating a shift towards a product-focused model [28] - The gross margin for product sales was reported at 1% in 2025, reflecting the challenges of early-stage manufacturing [8][28] - KULR has over 30 active customer development programs across various sectors, including KULR ONE Air, KULR ONE Space, and KULR ONE Guardian [12][19] Market Data and Key Metrics Changes - The KULR ONE Air platform is experiencing the most momentum, with over 20 active customer development agreements and plans to produce over 10,000 battery packs per month by late 2026 [29][34] - KULR has entered a five-year preferred battery supply agreement with Caban Energy, which is expected to contribute to revenue growth in the telecom sector [23][32] - The company is also focusing on AI data center applications, with expectations for revenue opportunities to materialize in 2027 [30][41] Company Strategy and Development Direction - The company's mission for 2026 is to eliminate distractions and focus on building and selling more KULR ONE batteries [6][34] - KULR aims to improve gross margins through automation and increased production volume, with an automated production line planned for the second half of 2026 [9][10] - The strategic focus is on high-growth markets such as autonomous platforms, digital infrastructure, and direct energy systems, which require specialized battery solutions [10][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges faced in 2025 but emphasizes a strong foundation for growth in 2026, with a commitment to execution and accountability [4][5] - The demand for high-power battery packs is identified as a significant growth driver, particularly in challenging environments [10][20] - Management expresses confidence in the stability and repeatability of the revenue base, with a diversified customer portfolio and ongoing engagements [37][38] Other Important Information - KULR's partnerships with battery cell manufacturers like Amprius and Molicel are part of a long-term strategy to access advanced battery technology [13] - The company is actively engaged in developing NDAA-compliant battery systems in collaboration with Hylio, which is crucial for government and defense-related applications [17][44] Q&A Session Summary Question: Which markets are seeing the most momentum today? - Management highlighted the KULR ONE Air platform for autonomous systems as the area with the highest momentum, with over 20 active customer agreements and plans for significant production [29] Question: Update on AI data center backup power market? - Management stated that development for the AI data center PBU product began in 2025, with expectations for revenue opportunities in 2027 [30] Question: Status in telecom and energy infrastructure? - Management confirmed that production has commenced with Caban Energy and that they are also exploring battery-as-a-service offerings directly with telecom operators [32] Question: Where is management most focused right now? - The primary focus for 2026 is on the KULR ONE Air platform, which shows the highest growth potential [34] Question: Biggest goals and milestones for 2026? - Management aims for significant growth in KULR ONE Air products, with a baseline target of 10,000 packs per month as automation is implemented [36] Question: Stability and repeatability of KULR ONE platform revenue? - Management indicated that the company is moving towards a more stable and repeatable product sales model in 2026, supported by a broader customer base [37][38] Question: Potential role in space-based AI data centers? - Management noted that while there are opportunities, it is not a primary focus for 2026 [39][40] Question: Revenue contributions from recent partnerships? - Management confirmed that both Hylio and Caban are expected to contribute to revenue in 2026, while AI data center business will be more relevant in 2027 [41]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $87.2 million, aligning with the midpoint of revised guidance, while full-year revenue reached $346.8 million, a 1.4% increase over 2024 [3][4] - Adjusted EBITDA for Q4 was $19.2 million, representing a margin expansion to 22%, up from 20.4% in Q4 2024, while full-year Adjusted EBITDA was $68.7 million, a 23% year-over-year increase [4][18] - Free cash flow for the year was $20 million, an increase of $5 million over 2024, with cash flow from operations rising to $37 million, a 19% increase year-over-year [4][14] Business Line Data and Key Metrics Changes - Financial Health revenue totaled $56.2 million in Q4, a 2% year-over-year increase, while Patient Care revenue was $31 million, reflecting a 6.6% decline primarily due to the sunset of the Centriq product [17][18] - For the full year, Financial Health revenue was $221.7 million, up 2%, while Patient Care revenue was approximately flat at $125.2 million [20][21] - Bookings for Q4 were $19.8 million, up $6 million year-over-year, and total bookings for the year were $82.9 million, a 1% increase compared to the prior year [17][20] Market Data and Key Metrics Changes - The overall sales pipeline value is at its highest in 9 quarters, having increased by 53% since the beginning of Q3, with a notable shift towards larger opportunities [5] - The percentage of recurring deals in the pipeline has risen to over 70%, up from approximately 57% last summer, indicating improved quality of opportunities [5] Company Strategy and Development Direction - The company is engaged in a strategic review process to maximize shareholder value and is not issuing formal guidance, but expects modest revenue growth in 2026 and a 200 basis points improvement in Adjusted EBITDA margins [3][22] - The company is focusing on a comprehensive AI strategy across four pillars: Financial Health, Patient Care, Customer Service, and Internal Development, aiming to enhance operational efficiency and customer satisfaction [8][9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in customer retention, particularly in the CBO segment, and highlighted ongoing efforts to improve processes and customer experience [6][29] - The company remains optimistic about its growth trajectory, citing a healthy demand environment and confidence in converting its growing pipeline [6][10] Other Important Information - The company has strengthened its financial position through disciplined debt reduction, lowering net debt by approximately $19.5 million year-to-date, and improving its net leverage ratio to 2x [14][15] - The company has opened a new Global Capacity Center in Chennai, which is expected to enhance its global delivery model [7] Q&A Session Summary Question: Can you explain the new bookings metric and how to use it for revenue visibility? - Management confirmed that recurring revenues and assumptions about bookings at conversion are key to understanding revenue visibility [25][26] Question: How did customer retention rates perform in Q4, and what are the expectations for 2026? - Management indicated that retention rates did not improve significantly in Q4, with expectations for modest improvement in 2026 [27][28] Question: What is the timeline for the strategic review process? - Management stated there is no specific timeline for the strategic review, emphasizing the focus on achieving the right outcome for shareholder value [30] Question: How do you see the conversion timing of larger deals in the pipeline? - Management noted that there are no capacity constraints, but the timing of bookings is often dependent on customer readiness [34][35] Question: What are the opportunities from the Rural Health Fund? - Management expressed commitment to helping hospitals access the $50 billion fund and emphasized the importance of being involved in shaping its use [72][74] Question: How is AI impacting the competitive landscape? - Management reported no significant changes in the competitive landscape yet, but acknowledged increased customer inquiries about AI initiatives [76][79] Question: What is the outlook for margin expansion? - Management indicated that the 200 basis points margin expansion will come from a combination of cost optimization and revenue mix improvements [80][81]