Financial Data and Key Metrics Changes - The company reported net revenue from continuing operations of $18.2 million for 2025, an 81% year-over-year increase compared to $10.1 million in 2024, exceeding previous guidance of $16.5 million [11] - Gross Merchandise Volume (GMV) grew 411% year-over-year, driven by the growth of the payments business [12] - General and administrative expenses were reduced by $9.9 million or 26% compared to the prior year, while R&D expenses increased by $1.9 million [14] Business Line Data and Key Metrics Changes - Financial technology, including payment processing via PSQ Payments and credit offerings via Credova, earned $7.3 million in net revenue, a 109% increase from the prior year [12] - The credit business revenue in Q4 increased by $1.5 million or 47% year-over-year to $4.8 million [13] - Repeat customer rates for the Credova platform increased by 25% compared to 2024, indicating stronger customer engagement [13] Market Data and Key Metrics Changes - The firearms industry showed growth despite broader market softness, with December 2025 NSSF Adjusted NICS checks declining approximately 3.4% year-over-year [5] - The company is focusing on underserved industries, particularly those moving towards e-commerce infrastructure, benefiting its payments and credit businesses [5] Company Strategy and Development Direction - The company is simplifying operations and focusing on financial infrastructure, emphasizing operational accountability and cash efficiency [4] - The strategic focus includes leveraging AI to improve underwriting performance and operational efficiency [7] - The company aims to build a more integrated financial platform for merchants and consumers, moving away from traditional payment rails [8][9] Management's Comments on Operating Environment and Future Outlook - Management believes the current operating environment presents opportunities for growth in fintech, particularly in underserved markets [4] - The company expects to see significant disintermediation across the payments ecosystem, allowing for more efficient systems and reduced transaction costs [8] - Management is optimistic about achieving profitability in the near term through cost reductions and improved revenue per employee [6] Other Important Information - The company incurred approximately $250,000 in cash severance expense in Q4, with expectations of recognizing one-time severance costs in the first half of 2026 [6] - The company had $16.1 million of cash and restricted cash as of December 31, 2025, with a net cash decrease of $14.2 million during the year [17] Q&A Session Summary Question: Why was now the appropriate time for the management change? - The management change was a deliberate decision made by the Board to align with the strategic pivot into fintech, leveraging the new CEO's background in financial technology [23] Question: How will the go-to-market strategy change for the company's fintech efforts? - The strategy will focus on executing what is already working, tapping into market demand for financial infrastructure and credit products [26] Question: What are the capital priorities for the company? - The focus is on running a capital-efficient business, improving revenue per employee, and moving towards profitability before considering debt repayment or strategic M&A [29] Question: Where do you see the biggest opportunity for payments and credit? - The company sees opportunities in the 501(c)(3) and 501(c)(4) space, as well as in the lending industry, where traditional fintech has been hesitant [35] Question: Is a digital asset strategy still part of the portfolio? - The focus is on stablecoins and new payment rails, aiming to improve transaction speed and reduce costs for merchants [38] Question: How will AI be integrated into the business? - AI will be used internally to enhance productivity and externally to improve compliance and efficiency in lending and payments [41] Question: How will proceeds from the divestiture be used? - Proceeds will be used to execute the product roadmap and improve unit economics, focusing on accretive revenue [46] Question: What KPIs should be followed to measure success? - Key metrics include top-line growth, adjusted EBITDA loss reduction, operating cash flow, and revenue per employee [48]

Financial Data and Key Metrics Changes - Adjusted net revenue for Q4 2025 reached BRL 5.7 billion, growing 2.1% year-over-year [4] - Adjusted EBITDA totaled BRL 3.4 billion, representing a 13% growth versus a year ago, with margins expanding to 60% [4] - Adjusted net income remained stable at around BRL 1.9 billion [4] - For the full year 2025, adjusted net revenue totaled BRL 22.2 billion, representing a 2.2% growth versus 2024 [5] - Adjusted EBITDA reached BRL 13.2 billion, growing 17% year-over-year, with margins expanding to 60% [5] - Reported net income for Q4 reached BRL 2.7 billion, representing 87% growth year-over-year [11] - Cash flow from operations reached BRL 3 billion, representing a 24% growth [5] Business Line Data and Key Metrics Changes - Water production totaled 789 million cubic meters in Q4, remaining stable [3] - Water connections reached approximately 9.5 million, increasing 0.4% year-over-year, while sewage connections grew 0.8%, reaching 8.3 million [3] - The number of units benefiting from subsidized rates reached nearly 2 million connections, or roughly 6 million people, doubling the average from 2024 [10] Market Data and Key Metrics Changes - The price index, excluding mix effects, remained stable as there were no rate reviews for 2025 [9] - Discounts granted to large clients were reduced by approximately BRL 450 million in 2025, with less than a handful of contracts still active [46] Company Strategy and Development Direction - The company’s strategy focuses on three priorities: delivering new concession agreement obligations, achieving operational efficiency, and improving financial efficiency [16] - CapEx for 2025 reached BRL 15.2 billion, representing a 120% increase year-over-year [17] - The company aims to enhance water safety and expand infrastructure capacity through significant investments [17] Management Comments on Operating Environment and Future Outlook - Management emphasized the importance of accelerating universal access and improving service reliability [16] - The company is optimistic about achieving universalization targets ahead of schedule, with significant progress already made [12] - Management highlighted the need for a strong regulatory framework to support future investments and opportunities [38] Other Important Information - The company ended 2025 with BRL 12 billion in cash, covering more than three years of amortizations [15] - The acquisition of MIE's controlling shares was completed, which is expected to increase reservoir capacity significantly [21] Q&A Session Questions and Answers Question: Potential upside to the BRL 70 billion CapEx number - Management indicated that inflation and evolving business needs could lead to an increase in the CapEx number, with investments being advanced to address water safety and metering upgrades [25][26] Question: Annualized level of CapEx in Q4 - Management stated that they are trying to accelerate CapEx and will maintain or increase the pace if possible [29] Question: Payroll line and capitalization of expenses - Management explained that personnel expenses were low due to cost reductions and that there was a higher level of capitalization of expenses in Q4, which should not be considered a one-off [34] Question: Strategic considerations for investing in Copasa - Management highlighted the importance of regulatory frameworks and the bidding process as critical factors in considering investments in Copasa [38][39] Question: Evolution of discounts for larger customers - Management reported that they have virtually zeroed out discounts for large clients and expect positive impacts in 2026 [46] Question: Update on CapEx for water safety - Management indicated that they expect to spend between BRL 1.5 billion and BRL 2 billion on water safety this year, with a total pipeline of close to BRL 8 billion [47][48]

Financial Data and Key Metrics Changes - Total revenues excluding IFRIC 12 increased by 17%, nearly doubling the passenger traffic growth of 9% [11] - Adjusted EBITDA excluding IFRIC 12 rose nearly 40% to $211 million, reflecting strong performance in Argentina and Armenia [14] - Net debt decreased to $502 million from $780 million in December 2024, improving the net leverage ratio to 0.7 times [17] Business Line Data and Key Metrics Changes - Aeronautical revenues increased by 17%, driven by strong results in Argentina, with a 21% increase in aeronautical revenues attributed to a 15% rise in international traffic volumes [11][12] - Commercial revenues grew by 16%, supported by higher contributions from cargo, fuel revenues, and solid growth across VIP lounges and parking facilities [12] - Cargo revenues were up 22% year-over-year, with strong contributions from Argentina, Uruguay, and Brazil [10] Market Data and Key Metrics Changes - Passenger traffic reached a record 22.3 million, with international traffic growing by 12% and domestic traffic increasing nearly 7% [4][5] - In Argentina, passenger traffic increased nearly 9%, with international traffic up 15% [6] - Italy's traffic grew by 8%, driven mainly by international travel, while Brazil's total traffic was up 12% [7][8] Company Strategy and Development Direction - The company secured a 35-year extension of the concession in Armenia and a six-year extension in Galapagos, enhancing long-term visibility [4][19] - The company is pursuing inorganic growth opportunities, having received concession awards in Iraq and Angola, while evaluating additional bidding processes [20] - The focus remains on disciplined capital allocation and expanding the portfolio through both organic initiatives and acquisitions [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued positive momentum in passenger traffic, particularly in Argentina, supported by strong international trends [21] - The geopolitical situation in the Middle East is being monitored closely for potential implications on international travel [21] - The company aims to prioritize commercial optimization and revenue per passenger growth across the portfolio [21] Other Important Information - The company ended the year with a strong balance sheet and significant financial flexibility, with total liquidity of $750 million [17] - The company received industry recognition, including being named Best Airport Operator in South America [20] Q&A Session Summary Question: Will the current margins profitability be the new base for CAAP going forward, and has the war impacted operations in Armenia? - Management indicated that margins are stable, with traffic growth observed in the first two months of the year, but approximately 10%-15% of traffic in Armenia has been affected by the war [24][25] Question: Any updates on the Argentina concession rebalance and the Italy investment opportunity? - Management stated they are on the right track regarding Argentina but could not provide a specific timeline due to political dynamics. Progress is being made in Italy, but further approvals are needed before construction can begin [30][31] Question: Can you elaborate on the capital allocation strategy and expected new regions for investment? - Management confirmed they are pursuing opportunities in Iraq and Angola and are looking at other regions, including the Middle East and Central Asia, while focusing on growing the portfolio [35][36] Question: How will funding for acquisitions outside of Argentina be managed? - Management indicated that funding for acquisitions would primarily come from cash on hand, given the size of the opportunities being pursued [40]

Financial Data and Key Metrics Changes - Adjusted net revenue for Q4 2025 reached BRL 5.7 billion, growing 2.1% year-over-year [4] - Adjusted EBITDA totaled BRL 3.4 billion, representing a 13% growth versus a year ago, with margins expanding to 60% [4][5] - Adjusted net income remained stable at around BRL 1.9 billion for Q4 2025 [4] - For the full year 2025, adjusted net revenue totaled BRL 22.2 billion, representing a 2.2% growth versus 2024 [5] - Adjusted EBITDA for the full year reached BRL 13.2 billion, growing 17% year-over-year, with margins also at 60% [5][6] - Reported net income for Q4 reached BRL 2.7 billion, representing 87% growth year-over-year [11] - Cash flow from operations reached BRL 3 billion for Q4, representing a 24% growth [5] Business Line Data and Key Metrics Changes - Water production totaled 789 million cubic meters in Q4, remaining stable [3] - Water connections increased by 0.4% year-over-year to approximately 9.5 million, while sewage connections grew 0.8% to 8.3 million [3][4] - The number of units benefiting from subsidized rates reached nearly 2 million connections, approximately 6 million people, doubling the average from 2024 [10] Market Data and Key Metrics Changes - The company achieved 84% of water targets, 74% of sewage collection, and 70% of sewage treatment for the year 2026 as of February 2026 [12] - The company generated BRL 8.5 billion in net income in 2025, with 75% reinvested to support infrastructure expansion [20] Company Strategy and Development Direction - The company’s strategy focuses on three priorities: delivering new concession agreement obligations, achieving operational efficiency, and improving financial efficiency [16] - CapEx for 2025 reached BRL 15.2 billion, representing a 120% increase year-over-year, aimed at accelerating universalization and expanding infrastructure capacity [16][17] - The company is advancing metering upgrades and integrating new water sources into its system to enhance operational flexibility and water safety [26] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of accelerating universal access and improving service reliability [16] - The company is committed to maintaining a strong balance sheet while pursuing significant investments in infrastructure [15] - Management expressed confidence in achieving universalization targets ahead of schedule and highlighted the positive impact of their investment program on the community [12][20] Other Important Information - The company concluded the acquisition of EMAE's controlling shares, which is expected to increase reservoir capacity in the metropolitan system by up to 52% in the long term [21][22] - The company has a robust expansion backlog with approximately BRL 39 billion in contracted investments through 2029 [18] Q&A Session Summary Question: Potential upside to the BRL 70 billion CapEx number - Management indicated that inflation and evolving business needs could increase the CapEx number, with investments in water safety and advanced metering upgrades being prioritized [25][26] Question: Annualized CapEx level in Q4 - Management stated that they aim to maintain or accelerate the CapEx pace if feasible, emphasizing the importance of delivering universal access [28] Question: Payroll line and cost efficiency - Management noted that personnel expenses were low due to cost reductions and capitalizing on more expenses through CapEx, reflecting a full-year result rather than a seasonal effect [33] Question: Strategic opportunities outside São Paulo - Management expressed interest in larger deals like Copasa but emphasized the importance of regulatory frameworks and bidding processes in decision-making [35][36] Question: Evolution of discounts for larger customers - Management reported capturing about BRL 450 million in discount removals in 2025, with a goal to zero out remaining contracts [44] - For water safety CapEx, management expects to spend between BRL 1.5 billion and BRL 2 billion this year [45]

Financial Data and Key Metrics Changes - The company reported net revenue from continuing operations of $18.2 million for 2025, an 81% year-over-year increase compared to $10.1 million in 2024, exceeding previous guidance of $16.5 million [11] - Gross Merchandise Volume (GMV) grew 411% year-over-year, driven by the growth of the payments business [12] - General and administrative expenses were reduced by $9.9 million or 26% compared to the prior year, while R&D expenses increased by $1.9 million [14][15] - The operating loss for 2025 was narrowed to $32 million, with a notable improvement in the operating loss of $9.7 million for Q4 compared to the prior year [15][18] Business Line Data and Key Metrics Changes - Financial technology, including payment processing via PSQ Payments and credit offerings via Credova, earned $7.3 million in net revenue, a 109% increase from the prior year [12] - The credit business revenue in Q4 increased by $1.5 million or 47% year-over-year to $4.8 million [13] - Repeat customer rates for the Credova platform increased by 25% compared to 2024, indicating stronger customer engagement [13] Market Data and Key Metrics Changes - The firearms industry showed a decline of approximately 3.4% year-over-year in December 2025, but the company's business continued to grow, indicating a structural market shift rather than a contraction [5] - The company is focusing on underserved industries, particularly in the fintech space, which is expected to benefit from younger digital-first buyers [5][8] Company Strategy and Development Direction - The company is simplifying its operations and focusing on financial infrastructure, with four core themes: strategic focus, operational accountability, cash efficiency, and higher revenue per employee [4] - The strategy includes leveraging AI to improve productivity and underwriting performance, with plans to expand AI applications across various business areas [7][40] - The company aims to build a more integrated financial platform designed specifically for merchants and consumers, moving away from legacy payment systems [8][9] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of executional discipline and strategic focus, with a commitment to reducing operating cash burn while efficiently growing the fintech platform [11] - The company expects significant disintermediation in the payments ecosystem, creating opportunities for new platforms that provide integrated financial services [8] - Management expressed confidence in the company's ability to deliver long-term shareholder value through market share growth and operational discipline [18] Other Important Information - The company incurred approximately $250,000 in cash severance expense in Q4, with expectations of lower cash burn in the coming quarters [6] - The company is evaluating divestitures, particularly in the Impact platform, and is in discussions regarding the EveryLife business [9] Q&A Session Summary Question: Why was now the appropriate time for the management change? - The management change was a deliberate decision made by the board to align with the strategic pivot into fintech, leveraging the new CEO's background in financial technology [23] Question: How will the go-to-market strategy change for the company's fintech efforts? - The strategy will focus on executing what is already working, tapping into market demand for financial infrastructure and credit products [26] Question: What are the capital priorities for the company? - The focus is on running a capital-efficient business, driving revenue per employee, and moving towards profitability before considering debt repayment or strategic M&A [29] Question: Where do you see the biggest opportunity in payments and credit? - The company sees opportunities in areas traditionally avoided by fintech, such as the 501(c)(3) and 501(c)(4) space, and the lending industry [35] Question: Is a digital asset strategy still part of the portfolio? - The focus is on stablecoins and new payment rails, aiming to improve transaction speed and reduce costs for merchants [38] Question: How will AI be integrated into the business? - AI will be used internally to enhance productivity and externally in consumer lending, with a comprehensive strategy being developed [40][42] Question: How will proceeds from the sale of the brand segment be used? - Proceeds will be used to execute on the product roadmap and improve unit economics, focusing on accretive revenue [46][47] Question: What KPIs should be followed to measure success? - Key metrics include top-line growth, adjusted EBITDA loss reduction, operating cash flow efficiency, and revenue per employee [48]

Financial Data and Key Metrics Changes - In Q4 2025, comparable store sales grew by 8.9%, with a two-year growth of 15.3%, marking the sixth consecutive quarter of positive comparable sales [4][19] - EBITDA for Q4 reached $11.9 million, a 67% increase year-over-year, while total sales increased by 9.1% to $230.4 million [4][19] - For the full year 2025, net sales totaled $820 million, with comparable store sales increasing by 9.7% and 13.1% on a two-year basis [10][21] - Gross margin improved by 210 basis points to 39.6% for the year, driven by fewer markdowns and lower shrink [22] Business Line Data and Key Metrics Changes - The Children's category posted high single-digit growth, becoming a cornerstone of the company [6] - Men's category also showed solid growth, with a balanced approach to product offerings [7] - Women's footwear began to show progress, indicating potential for future growth in the broader footwear category [7] Market Data and Key Metrics Changes - Customer traffic was a significant driver of growth, with transaction counts increasing in the mid- to upper-single digits [4] - The company reported a strong performance in the Family Basics and sleepwear categories, contributing to overall sales growth [8] Company Strategy and Development Direction - The company executed a three-phase strategy framework: repair, execute, and optimize, focusing on restoring business fundamentals and improving operational disciplines [9] - A clear focus on serving Black customers, leveraging neighborhood-based locations, and enhancing merchandising strategies are key differentiators [11][12] - The company plans to open approximately 25 new stores in 2026 and remodel 50 locations, with a disciplined approach to growth [27][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term growth trajectory, supported by a clear strategic direction and operational improvements [3][29] - The outlook for fiscal 2026 includes total sales growth of 6%-8% and comparable same-store sales growth of 5%-7% [25][26] - Management emphasized the importance of consistent execution and the potential for significant profit growth in 2026 [30][34] Other Important Information - The company ended the year with a healthy balance sheet, including $66 million in cash and no debt [23] - A new loyalty program is currently in testing, with plans for a full rollout in the latter half of the year [59] Q&A Session Summary Question: Can you discuss the impact of weather on sales in January and February? - Management acknowledged that January weather negatively impacted sales but noted a recovery in February, aided by tax refunds [42][43] Question: What is the current status of closeouts as a percentage of sales? - Closeouts vary by category, with shoes having a high penetration, and management sees potential for growth in this area [44][45] Question: Can you provide more details on potential acquisitions? - Management is in early stages of exploring synergistic acquisition opportunities but emphasized a selective approach [46][47] Question: How do you anticipate comp trends for Q1? - Management expects high single-digit growth for Q1, considering various factors including tax refunds [52] Question: What is the expected cadence for new store openings? - The company plans to open stores in three strategic time periods throughout the year to align with peak shopping seasons [55][56] Question: What is the status of the loyalty program? - The loyalty program is in testing, with plans to refine messaging before a full rollout later in the year [58][60]

Financial Data and Key Metrics Changes - Total revenues excluding IFRIC 12 increased by 17%, nearly doubling the passenger traffic growth of 9% [11] - Adjusted EBITDA excluding IFRIC 12 rose nearly 40% to $211 million, reflecting strong performance in Argentina and Armenia [14] - The company closed the quarter with total liquidity of $750 million, a 36% increase from $526 million at year-end 2024 [17] - Total debt at year-end was $1.1 billion, with net debt decreasing to $502 million from $780 million in December 2024 [17] Business Line Data and Key Metrics Changes - Aeronautical revenues increased by 17%, driven by strong results in Argentina, with a 21% increase in aeronautical revenues [11][12] - Commercial revenues grew by 16%, supported by higher contributions from cargo, fuel revenues, and solid growth across VIP lounges and parking facilities [12] - Cargo revenues were up 22% year-over-year, with strong contributions from Argentina, Uruguay, and Brazil [10] Market Data and Key Metrics Changes - Passenger traffic in Argentina increased nearly 9%, with domestic traffic up 6% and international traffic up 15% [6] - International traffic across the portfolio grew by 12%, with Argentina contributing more than half of the total increase [5] - Traffic in Italy grew by 8%, driven mainly by the international segment, which increased by 11% [7] - Brazil's total traffic was up 12%, reflecting a better environment among airlines and stronger summer season activity [8] Company Strategy and Development Direction - The company secured a 35-year extension of the concession in Armenia and a 6-year extension in Galapagos, enhancing long-term visibility [4][19] - The company has been awarded concessions and is a preferred bidder for new airport concessions in Baghdad, Iraq, and Luanda, Angola, while evaluating additional opportunities [20] - The focus remains on disciplined capital allocation and expanding the portfolio through both organic and inorganic growth strategies [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued positive momentum in passenger traffic, particularly in Argentina, supported by strong international trends [21] - The geopolitical situation in the Middle East is being monitored closely for potential implications on international travel [21] - The company aims to prioritize commercial optimization and revenue per passenger growth across the portfolio [21] Other Important Information - The company achieved significant industry recognition, with various airports receiving awards for operational excellence and customer experience [20] Q&A Session Summary Question: Regarding traffic growth and profitability margins - Management indicated that margins are stable and expect continued growth in traffic and profitability, with approximately 10%-15% of traffic in Armenia affected by the war [24][25] Question: Update on Argentina concession rebalance and Italy investment opportunity - Management stated they are on the right track regarding Argentina's economic reequilibrium but could not provide a specific timeline due to political dynamics. Progress is being made in Italy, but further approvals are needed before construction can begin [30][31] Question: Capital allocation strategy and commercial revenue growth - Management highlighted ongoing opportunities in Iraq and Angola, with a focus on expanding the portfolio. Commercial revenues are expected to continue growing, although not as intensely as in 2025 [35][36]

Financial Data and Key Metrics Changes - In Q4 2025, comparable store sales grew by 8.9%, with a two-year growth of 15.3%, marking the sixth consecutive quarter of positive comparable sales [4][19] - EBITDA for Q4 reached $11.9 million, a 67% increase year-over-year, while total sales increased by 9.1% to $230.4 million [4][19] - For the full year 2025, net sales totaled $820 million, with comparable store sales increasing by 9.7% and a two-year growth of 13.1% [10][21] - Gross margin improved by 210 basis points to 39.6% for the year, driven by fewer markdowns and lower shrink [22] Business Line Data and Key Metrics Changes - The Children's category posted high single-digit growth, becoming a cornerstone of the company [6] - Men's category also showed solid growth, with a balanced approach to product offerings [7] - Women's footwear began to show progress, indicating potential for future growth in the broader footwear category [7] Market Data and Key Metrics Changes - Customer traffic was a significant driver of growth, with transaction counts increasing in the mid- to upper-single digits [4] - The company reported a strong performance in the Family Basics and sleepwear categories, contributing to overall growth [8] Company Strategy and Development Direction - The company executed a three-phase strategy framework: repair, execute, and optimize, focusing on restoring fundamental business disciplines [9] - A clear focus on serving Black customers is a strategic advantage, leveraging cultural relevance to curate appealing assortments [11] - The company plans to open approximately 25 new stores in 2026 and remodel 50 locations, with a disciplined approach to growth [27][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term growth trajectory, emphasizing the importance of consistent execution and operational improvements [3][30] - The outlook for fiscal 2026 includes total sales growth of 6%-8% and comparable same-store sales growth of 5%-7% [25][26] - The company is exploring synergistic acquisition opportunities to complement its growth strategy [46] Other Important Information - The company ended the year with a healthy balance sheet, including $66 million in cash and no debt [23] - A new AI-based allocation system has been implemented to enhance inventory management and sales efficiency [15][34] Q&A Session Summary Question: Can you discuss the impact of weather on sales in January and February? - Management acknowledged that January weather negatively impacted sales but noted a recovery in February, aided by tax refunds [42][43] Question: What is the current status of closeouts as a percentage of sales? - Closeouts currently represent about 30% of the sales mix, with potential for growth, particularly in the shoe category [44][45] Question: Can you provide details on potential acquisitions? - Management is in early stages of exploring acquisition opportunities that would complement the company's growth strategy, emphasizing a selective approach [46][47] Question: How are comp trends shaping up for Q1? - Management anticipates high single-digit growth for Q1, with a focus on the impact of tax refunds and seasonal trends [52] Question: What is the status of the loyalty program? - The loyalty program is currently in testing, with plans for a full rollout later in the year after refining messaging and marketing strategies [58][60]

Financial Data and Key Metrics Changes - Adjusted net revenue for Q4 2025 reached BRL 5.7 billion, growing 2.1% year-over-year [4] - Adjusted EBITDA totaled BRL 3.4 billion, representing a 13% growth versus a year ago, with margins expanding to 60% [4] - Adjusted net income remained stable at around BRL 1.9 billion [4] - For the full year 2025, adjusted net revenue totaled BRL 22.2 billion, representing a 2.2% growth versus 2024 [5] - Adjusted EBITDA for the full year reached BRL 13.2 billion, growing 17% year-over-year, with margins expanding to 60% [5] - Reported net income for Q4 reached BRL 2.7 billion, representing 87% growth year-over-year [11] - Cash flow from operations reached BRL 3 billion, representing a 24% growth [5] Business Line Data and Key Metrics Changes - Water production totaled 789 million cubic meters in Q4, remaining stable [3] - Water connections increased by 0.4% year-over-year, reaching approximately 9.5 million, while sewage connections grew 0.8% to 8.3 million [3] - The number of units benefiting from subsidized rates reached nearly 2 million connections, approximately 6 million people, doubling the average from 2024 [10] Market Data and Key Metrics Changes - The price index, excluding mix effects, remained stable, with no rate reviews for 2025 [9] - Discounts for large clients contributed about 1.5 percentage points to revenue growth, with BRL 450 million worth of discounts removed in 2025 [8][47] Company Strategy and Development Direction - The company focuses on three strategic priorities: delivering new concession agreement obligations, achieving operational efficiency, and improving financial efficiency [17] - CapEx for 2025 reached BRL 15.2 billion, a 120% increase year-over-year, supporting universalization and infrastructure capacity expansion [17] - The company aims to enhance water safety and metering upgrades, with significant investments planned for the future [27][48] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong cash generation and a fortress-like balance sheet, reinforcing the ability to fund investment programs [5][16] - The company is optimistic about achieving universal access targets ahead of schedule, with significant infrastructure projects planned for 2026 [12][13] - Management emphasized the importance of regulatory frameworks and bidding processes for potential acquisitions, particularly regarding Copasa [39][40] Other Important Information - The company concluded the acquisition of MIE's controlling shares, which is expected to increase reservoir capacity significantly [22][23] - The company has a strong liquidity position with BRL 12 billion in cash, covering more than three years of amortizations [16] Q&A Session All Questions and Answers Question: Potential upside to the BRL 70 billion CapEx number - Management indicated that inflation and evolving business needs could lead to an increase in the CapEx number, with investments in water safety and metering upgrades being prioritized [25][26][27] Question: Annualized level of CapEx in Q4 - Management stated that they aim to maintain or accelerate CapEx levels in 2026, depending on execution capabilities [29][30] Question: Payroll line and cost efficiency - Management confirmed that personnel expenses were low due to cost reductions and centralization efforts, with a focus on capitalizing more expenses through CapEx [33][35] Question: Strategic opportunities outside São Paulo - Management expressed interest in larger deals like Copasa, emphasizing the importance of regulatory frameworks and bidding processes in decision-making [39][40] Question: Evolution of discounts for larger customers - Management reported that BRL 450 million in discounts were removed in 2025, with plans to continue capturing remaining discounts [47][48]

Financial Data and Key Metrics Changes - The company reported net revenue from continuing operations of $18.2 million for 2025, an 81% year-over-year increase compared to $10.1 million in 2024, exceeding previous guidance of $16.5 million [11] - Gross merchandise volume (GMV) grew 411% year-over-year, driven by the growth of the payments business [12] - Operating loss improved to $9.7 million in Q4 2025, compared to a $32 million operating loss for the year, with $16.7 million of the loss related to non-cash stock-based compensation and depreciation [15] Business Line Data and Key Metrics Changes - Financial technology revenue, including payment processing and credit offerings, reached $7.3 million in Q4 2025, a 109% increase from the prior year [12] - Credit business revenue in Q4 increased by $1.5 million or 47% year-over-year to $4.8 million [12] - Repeat customer rates for the Credova platform increased by 25% compared to 2024, indicating stronger customer engagement [12] Market Data and Key Metrics Changes - The firearms industry showed growth despite broader market softness, with a 3.4% year-over-year decline in NSSF adjusted NICS checks in December 2025 [5] - The company is focusing on underserved industries, particularly in e-commerce, which benefits its payments and credit businesses [5] Company Strategy and Development Direction - The company is simplifying its operations and focusing on financial infrastructure, with four core themes: strategic focus, operational accountability, cash efficiency, and higher revenue per employee [4] - The strategy includes leveraging AI to improve underwriting performance and operational efficiency, with a goal of increasing revenue per employee significantly throughout 2026 [6][7] - The company is evaluating divestitures of non-core assets and focusing on building an integrated financial platform for merchants and consumers [9][10] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of executional discipline and strategic focus, with a commitment to reducing operating cash burn while growing the financial technology platform [11] - The company expects to see significant disintermediation in the payments ecosystem, creating opportunities for new platforms that provide integrated financial services [8] - Management expressed confidence in the company's ability to deliver long-term shareholder value through operational discipline and market share growth [18] Other Important Information - The company reduced SG&A expenses by $9.9 million year-over-year, reflecting strong expense discipline [14] - Cash and restricted cash as of December 31, 2025, totaled $16.1 million, with net cash for operating activities decreasing by $14.2 million during 2025 [17] Q&A Session Summary Question: Why was now the appropriate time for the management change? - The management change was a deliberate decision made by the board to align with the strategic pivot into Fintech, leveraging the new CEO's background in financial technology [22] Question: How will the go-to-market strategy change for the company's fintech efforts? - The strategy will focus on executing what is working, particularly in credit and payment products for underserved industries [25][26] Question: What are the capital priorities moving forward? - The focus will be on running a capital-efficient business, driving revenue per employee, and moving towards profitability before considering debt repayment or strategic M&A [27][28] Question: Where do you see the biggest opportunity in payments and credit? - The company sees opportunities in the 501(c)(3) and 501(c)(4) space, as well as in the lending industry, where traditional fintech has shied away [34][35] Question: What is the focus regarding digital assets? - The focus is on stablecoins and new payment rails that can improve transaction speed and reduce costs for merchants [37] Question: How will AI be integrated into the business? - AI will be used internally to increase cognitive capacity and improve efficiency, with a comprehensive strategy being developed [39][40] Question: How will proceeds from the sale of the brand segment be used? - Proceeds will be used to execute the product roadmap and focus on revenue that has good unit economics [45][46] Question: What KPIs should be followed to measure success? - Key metrics include top-line growth, adjusted EBITDA loss reduction, operating cash flow, and revenue per employee [47][48]