Citigroup (NYSE:C) Q3 2025 Earnings Call October 14, 2025 11:00 AM ET Company ParticipantsMark Mason - CFOMike Mayo - Managing Director and Head of U.S. Large-Cap Bank ResearchGerard Cassidy - Managing DirectorBetsy Graseck - Global Head of Banks and Diversified Finance ResearchEbrahim Poonawala - Managing Director and Head of North American Banks ResearchJenn Landis - Head of Investor RelationsJane Fraser - CEOChris McGratty - Head of U.S. Bank ResearchConference Call ParticipantsJohn McDonald - Senior Res ...

Citigroup (NYSE:C) Q3 2025 Earnings Call October 14, 2025 11:00 AM ET Company ParticipantsMark Mason - CFOMike Mayo - Managing Director and Head of U.S. Large-Cap Bank ResearchGerard Cassidy - Managing DirectorBetsy Graseck - Global Head of Banks and Diversified Finance ResearchEbrahim Poonawala - Managing Director and Head of North American Banks ResearchJenn Landis - Head of Investor RelationsJane Fraser - CEOChris McGratty - Head of U.S. Bank ResearchConference Call ParticipantsJohn McDonald - Senior Res ...

Financial Data and Key Metrics Changes - The company reported a net income of $3.8 billion and earnings per share (EPS) of $1.86, with a return on tangible capital (ROTC) of 8%. Adjusted EPS, excluding goodwill impairment, was $2.24, with an adjusted ROTC of 9.7% [3][14] - Revenues increased by 9% year-over-year, driven by growth across all business lines [3][14] - Total expenses were $14.3 billion, up 9%, largely due to goodwill impairment, while adjusted expenses were $13.6 billion, up 3% [15][16] Business Line Data and Key Metrics Changes - Services revenue grew by 7%, with assets under custody increasing by 13% and cross-border transactions up by 10% [4][22] - Markets revenue increased by 15%, with fixed income up 12% and equities up 24% [24] - Banking revenues surged by 34%, driven by a 17% increase in investment banking fees and a 39% rise in corporate lending revenues [25] - Wealth management revenue rose by 8%, with record net new investment assets of $18.6 billion [26] - US Personal Banking (USPB) revenue increased by 7%, with branded cards revenue up 8% and retail banking revenue up 30% [29] Market Data and Key Metrics Changes - The U.S. economy remains resilient, with consistent consumer spending and tech investments driving growth, while China experiences a slowdown in domestic spending [10][11] - The company noted pockets of valuation frothiness in the market, emphasizing the need for discipline [10] Company Strategy and Development Direction - The company is focused on simplifying operations and investing in technology to enhance agility and modernize banking services [8] - A significant partnership with BlackRock was announced to manage $80 billion of client assets, aligning with an open architecture strategy [4] - The company is committed to embedding AI into operations, with nearly 180,000 employees using proprietary AI tools [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to exceed $84 billion in revenues for the year, with expectations for net interest income (NII) to rise by around 5.5% [36] - The company anticipates continued growth in NII and plans to maintain a disciplined approach to expenses while targeting an ROTC of 10% to 11% next year [60][62] Other Important Information - The company returned over $6 billion in capital to shareholders during the third quarter, with $5 billion in share repurchases [7] - The CET1 capital ratio was reported at 13.2%, exceeding regulatory requirements [19] Q&A Session Summary Question: Update on actions related to the consent order regarding risk compliance and controls - Management reported significant progress, with over two-thirds of programs at or near target state, and emphasized improvements in automation and preventive controls [40][41] Question: Thoughts on the Banamex transaction and IPO timing - Management highlighted the 25% stake purchase as a significant step towards de-consolidation, with regulatory approval expected to take 9 to 12 months [46][49] Question: Pace of stablecoin adoption and its importance - Management noted that tokenized deposits are preferred for client needs, with ongoing investments in digital assets and stablecoin solutions [53][55] Question: Efficiency path for next year and potential for lower expenses - Management indicated a path for lower expenses in 2026, driven by reduced transformation spend and stranded costs, while maintaining strong revenue growth [60][62]

Financial Data and Key Metrics Changes - For the second quarter, revenue increased slightly to $5,160,000 compared to $5,130,000 in the previous quarter, marking the sixth consecutive quarter of revenue over $5,000,000 [20][29] - Net income for the quarter increased 27% to $431,000 compared to $340,000 last year, reflecting higher gross profit and lower operating expenses [20][33] - For the first half of fiscal year 2026, total sales reached a record $10,300,000, up from $10,190,000 in the previous year, with net income increasing 36% to $917,000 [23][37] Business Line Data and Key Metrics Changes - Medical market sales increased by 150% year over year to $1,000,000, driven by balloon coating systems shipped to the U.S., Europe, and China [19][22] - Integrated Coatings Systems sales decreased by 24% to $1,530,000, primarily due to a customer-requested delivery delay [21] - OEM sales increased by 92% to $394,000, driven by strong shipments to Fluxer OEMs and new optics-related OEM wins [21] Market Data and Key Metrics Changes - U.S.-Canada sales decreased by 22% year over year, driven by slowing momentum in the clean energy industry [20] - Sales in Asia increased by 153% year over year, with major growth in China and other parts of Asia [20] - EMEA sales increased by 25%, while Latin America sales decreased by $74,000 [21] Company Strategy and Development Direction - The company has shifted to offering larger, more complex systems, which has broadened its addressable market and increased average unit selling prices [9][16] - The diversification strategy has shown momentum in the medical device industry, offsetting declines in clean energy orders [14][27] - Investments in R&D and application engineering are aimed at enhancing customer partnerships and driving long-term growth [64][66] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, supported by a solid backlog of $11,200,000 and a strong balance sheet with $10,600,000 in cash and no debt [15][26] - The company anticipates modest revenue growth for the full fiscal year, balancing caution with expected demand from the medical device industry [15][27] - Management noted that the clean energy sector is expected to decline this year, but diversification efforts are expected to mitigate this impact [14][27] Other Important Information - The company reported a gross profit margin increase to 50% for the second quarter, attributed to a favorable product mix and reduced costs [29][30] - The company has invested $1,300,000 in R&D for the first half of fiscal year 2026, compared to $1,400,000 in the previous year [26][34] - The company maintains a strong cash position with no outstanding debt, allowing for continued investment in growth initiatives [37] Q&A Session Summary Question: Insights on medical device strength and Chinese exposure - Management noted that despite challenges in the Chinese market, significant orders have been captured due to superior quality compared to local competitors [42][45] Question: Details on new optics-related OEMs - Management indicated that these new partnerships are significant for long-term market entry, although immediate revenue impact may be limited [76] Question: Semiconductor market outlook - Management reported strong interest from customers at a recent trade show, indicating potential growth in the semiconductor sector [79] Question: Backlog revenue recognition timeframe - The majority of recent large orders will be recognized in FY 2027, with some expected to ship in the current fiscal year [87] Question: Projections for second half sales - Management expects Q3 to be slightly higher than Q4 due to a system shipment delay [90]

Financial Data and Key Metrics Changes - The company reported net income of $5.6 billion for the third quarter, a 9% increase from the previous year, with diluted earnings per share at $1.66 [28] - Revenue increased by 5% year-over-year, driven by growth in both net interest income and fee-based revenue [6][28] - Noninterest income rose by $810 million, or 9%, from a year ago, reflecting strong growth in wealth management and investment banking [32][40] Business Line Data and Key Metrics Changes - Investment banking fees increased by 25% year-over-year, indicating strong performance in this segment [6] - Consumer small and business banking revenue grew by 6% from a year ago, driven by lower deposit costs and higher balances [36] - Wealth and investment management revenue increased by 8% from a year ago, supported by higher asset-based fees and net interest income [40] Market Data and Key Metrics Changes - The company’s total assets surpassed $2 trillion for the first time, reflecting growth in trading-related assets in corporate and investment banking, which increased by 50% since the end of 2023 [17] - Average loans grew by $18.4 billion year-over-year, with notable increases in commercial and industrial loans, securities-based lending, and credit card loans [31] - Average deposits declined by $1.8 billion from a year ago, primarily due to a reduction in higher-cost corporate treasury deposits [32] Company Strategy and Development Direction - The company aims to be the top U.S. consumer and small business bank and wealth manager, with aspirations to achieve a return on tangible common equity (ROTCE) of 17% to 18% in the medium term [15][22] - The lifting of the asset cap allows the company to grow its balance sheet and compete more effectively, focusing on domestic growth opportunities [9][16] - The company has simplified its business mix by exiting non-core businesses, targeting investments in areas with higher growth potential [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the U.S. economy and markets, emphasizing the importance of domestic growth [9][10] - The company is optimistic about achieving higher returns due to improved credit performance and strategic investments [23][24] - Management noted that consumer spending remains consistent, with no significant changes in credit quality observed [77][78] Other Important Information - The company has reduced its headcount by 24% since 2020, contributing to improved efficiency [12] - The CET1 ratio was maintained at 11%, with over $30 billion in capital above regulatory minimums, allowing for continued share repurchases [25][36] Q&A Session Summary Question: Clarification on the new ROTCE target - Management indicated that the 17-18% ROTCE target is a medium-term goal, likely taking longer than a year to achieve, depending on various factors [46][48] Question: Insights on fourth quarter net interest income - Management discussed several drivers for expected growth in net interest income, including loan growth and fixed asset repricing [50][53] Question: Opportunities for cost savings and efficiency - Management highlighted ongoing efforts to improve efficiency through headcount reductions and automation, with significant opportunities remaining [56][58] Question: Potential for inorganic growth through M&A - Management acknowledged the possibility of considering M&A opportunities but emphasized a focus on organic growth strategies [60][62] Question: Loan growth momentum and credit card customer acquisition - Management noted strong loan growth momentum, particularly in credit cards, with a mix of new and existing customers contributing to this growth [67][71] Question: Overall health of the consumer and credit quality - Management reported consistent consumer spending and strong credit performance, with no significant concerns in the auto lending sector [77][80]

Financial Data and Key Metrics Changes - The company reported net income of $5.6 billion for Q3 2025, a 9% increase from the previous year, with diluted earnings per share at $1.66 [26] - Revenue increased by 5% year-over-year, driven by growth in both net interest income and fee-based revenue [5][26] - Noninterest income rose by $810 million, or 9%, from a year ago, with strong growth in wealth management and investment banking [30] Business Line Data and Key Metrics Changes - Investment banking fees increased by 25% year-over-year, reflecting strong performance in leveraged finance, equity capital markets, and M&A [5][37] - Consumer small and business banking revenue grew by 6% from a year ago, driven by lower deposit costs and higher deposit and loan balances [34] - Wealth and investment management revenue increased by 8% year-over-year, supported by growth in asset-based fees and net interest income [38] Market Data and Key Metrics Changes - The company has seen average loans grow by $18.4 billion year-over-year, with notable increases in commercial and industrial loans [28] - Average deposits declined by $1.8 billion from a year ago, primarily due to a reduction in higher-cost corporate treasury deposits [30] - The total assets reached over $2 trillion for the first time in the company's history, with trading-related assets in corporate and investment banking up 50% since the end of 2023 [14] Company Strategy and Development Direction - The company aims to be the top U.S. consumer and small business bank and wealth manager, with aspirations to achieve a return on tangible common equity (ROTCE) of 17% to 18% in the medium term [21][22] - The lifting of the asset cap allows the company to grow its balance sheet and compete more effectively, focusing on domestic growth opportunities [7][13] - The company has simplified its business mix by exiting non-core businesses, targeting investments in areas with higher growth potential [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the U.S. economy and markets, emphasizing the company's focus on domestic growth [7][8] - The management team highlighted the importance of maintaining strong credit discipline and improving efficiency across the organization [26][41] - The company anticipates continued growth in net interest income and fee-based revenue, driven by loan growth and improved market conditions [39] Other Important Information - The company has reduced its headcount by 24% since Q2 2020, contributing to improved efficiency [10] - The CET1 ratio was maintained at 11%, well above regulatory minimums, with plans for continued share repurchases [33][23] - The company has generated over $20 billion in after-tax earnings annually, providing flexibility for growth and capital returns [24] Q&A Session Summary Question: Clarification on the new ROTCE target - Management indicated that the 17-18% ROTCE target is a medium-term goal, likely taking longer than a year to achieve, depending on various factors [44][46] Question: Insights on fourth quarter net interest income ramp - Management discussed several drivers for the expected increase in net interest income, including loan growth and fixed asset repricing [48][50] Question: Opportunities for cost savings and efficiency improvements - Management highlighted ongoing efforts to streamline operations, including headcount reductions and automation initiatives, to drive improved efficiency [55][57] Question: Potential for inorganic growth through M&A - Management acknowledged the possibility of considering inorganic growth opportunities but emphasized a focus on organic growth strategies [59][60] Question: Loan growth momentum and credit card customer acquisition - Management noted strong loan growth, particularly in consumer loans, and indicated that new customer acquisition is balanced between existing and new customers [66][77] Question: Overall health of the consumer and credit quality - Management reported consistent consumer spending and stable deposits, indicating a strong consumer health without significant concerns [84][88]

Financial Data and Key Metrics Changes - The company reported net revenues of $15.2 billion for Q3 2025, with earnings per share of $12.25 and a return on equity (ROE) of 14.2% [2][13] - Year-to-date ROE improved to 14.6% and 15.6% [2] - The company returned $3.3 billion to shareholders, including $1.3 billion in dividends and $2 billion in stock repurchases [19] Business Line Data and Key Metrics Changes - Global Banking & Markets generated revenues of $10.1 billion, with an ROE of 17% year-to-date [13] - Advisory revenues reached $1.4 billion, up 60% year-over-year, reflecting increased M&A activity [13] - Equity underwriting revenues increased by 21% year-over-year to $465 million, driven by a rise in IPO activity [14] - Debt underwriting revenues rose 30% to $788 million, primarily due to higher leveraged finance activity [14] - FICC net revenues were $3.5 billion, up 17% year-over-year, with strong performance in rates, mortgages, and commodities [15] - Asset and wealth management revenues totaled $4.4 billion, with management and other fees up 12% year-over-year to a record $2.9 billion [16] Market Data and Key Metrics Changes - The company advised on over $1 trillion in announced M&A volumes for 2025 year-to-date, significantly ahead of competitors [2] - Sponsor activity is tracking 40% higher compared to the previous year, with over $1 trillion in dry powder available [4] - Assets under supervision reached a record $3.5 trillion, with $80 billion in net market appreciation and $56 billion in long-term net inflows [17] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance operational efficiency and drive growth through the "One Goldman Sachs 3.0" initiative [10][11] - The acquisition of Industry Ventures aims to enhance the company's venture capital capabilities and strengthen its asset management platform [8][9] - The company is optimistic about the investment banking outlook, expecting an upswing in activity over the next 12 to 24 months [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the firm's ability to navigate the current economic environment, emphasizing disciplined risk management [6][19] - The regulatory environment is improving, which is expected to enhance the company's competitive positioning [44] - The company anticipates continued growth in asset and wealth management, with expectations of raising approximately $100 billion in alternatives this year [7][16] Other Important Information - The company is committed to maintaining a strong risk management culture, particularly in light of recent market volatility [38] - The effective tax rate for the year-to-date was 21.5%, with an expected full-year rate of approximately 22% [18] Q&A Session Summary Question: Follow-up on risk management and synthetic risk transfer - Management clarified that their approach to synthetic risk transfer (SRT) remains unchanged, focusing on dynamic risk management of credit exposures [25][26] Question: Clarification on One Goldman Sachs 3.0 initiative - Management explained that the initiative is driven by advancements in technology, aiming to enhance efficiency and scalability, not due to revenue issues [30][32] Question: Concerns about private credit risks - Management reassured that their lending practices are robust, with a diversified portfolio and strong risk management processes in place [36][38] Question: Expectations around regulatory changes - Management indicated that regulatory improvements are expected to enhance competitive positioning, with significant progress anticipated in the coming months [42][44] Question: Opportunities for growth in wealth and asset management - Management emphasized a focus on enhancing returns in asset and wealth management, with strategic acquisitions to strengthen the platform [50][68] Question: Insights on equities business performance - Management acknowledged softer performance in cash equities but highlighted strong overall performance in the equities platform [55][56] Question: Risk management around collateral integrity - Management reiterated the importance of stringent underwriting standards and ongoing monitoring to ensure collateral integrity [58][59]

Financial Data and Key Metrics Changes - The company reported an EPS of $0.43 and an adjusted EPS of $1.07 for Q3 2025, with a tangible book value per share growing at a compounded annual growth rate of 11.8% since the IPO [7][10] - Pre-tax pre-provision net revenue (PPNR) was $64 million, or $81 million on an adjusted basis, with a net interest margin of 3.95% and an efficiency ratio of 63.2% [9][10] - Adjusted return on average assets was 0.58%, or 1.43% on an adjusted basis, and return on tangible common equity was 5.82%, or 14.7% on an adjusted basis [10] Business Line Data and Key Metrics Changes - Net interest income for the quarter was $147.2 million, a 32.2% increase from the prior quarter and a 38.9% increase from the same quarter last year [19] - Non-interest income on an adjusted basis was $27.3 million, up from $25.8 million in the prior quarter, with increases in mortgage banking and investment services [20] - Total non-interest expense was $109.9 million, including $16.1 million in merger and integration costs, with an adjusted core efficiency ratio improving to 53.3% from 56.9% [21][22] Market Data and Key Metrics Changes - The company remains bullish on markets in Tennessee, Alabama, Georgia, Northern Kentucky, and North Carolina, expecting to capitalize on market disruptions due to industry consolidation [12][14] - The company executed a targeted deposit campaign, resulting in approximately $320 million in net new deposit balances, despite a decrease in non-relationship deposits [27] Company Strategy and Development Direction - The company aims for growth through both organic and inorganic means, focusing on contiguous geography and compatible culture for acquisitions [15][64] - The management emphasizes a client-first model and scalable processes to navigate anticipated market disruptions and drive organic growth [14][16] - The company plans to maintain a strong balance sheet to capitalize on growth opportunities and market disruptions [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the loan pipeline, indicating it is as strong as it has been in two years, despite temporary disruptions from the merger [43][44] - The company expects to achieve 50% of deal synergies in the second half of 2025 and 100% in 2026, with a focus on maintaining a strong capital position [21][29] - Management anticipates continued margin expansion and a stable outlook on credit, with a non-performing assets ratio of 0.89% [24][30] Other Important Information - The company completed the merger with Southern States Bancshares on July 1, 2025, and successfully transitioned to operating as a single entity by September 2, 2025 [11] - The company repurchased approximately $24 million of its shares during the quarter [27] Q&A Session Summary Question: Impact of Southern States Bancshares on margin and deposit rates - Management indicated that the Southern States balance sheet added approximately 6 to 8 basis points to the core margin, with expectations of maintaining a margin in the mid-3.80% range despite anticipated rate cuts [38][40] Question: Confidence in loan growth and pipeline - Management expressed confidence in the loan pipeline, noting it is robust and that core deposit growth is essential for sustaining loan growth [43][44] Question: Growth expectations and market opportunities - Management acknowledged the potential for growth from market disruptions and emphasized a balanced approach between organic and inorganic growth strategies [64][78] Question: Capital management and future growth - Management discussed maintaining elevated capital levels to take advantage of growth opportunities while also considering share repurchases [118][120] Question: Expectations for mortgage division performance - Management noted potential upside in the mortgage division with possible rate cuts, emphasizing a focus on purchase loans rather than refinances [100][106]

Financial Data and Key Metrics Changes - Organic sales for fiscal year 2025 grew by 2% and core earnings per share increased by 4% on a currency-neutral basis [20][22] - Adjusted free cash flow productivity was reported at 87% [20] - The company has achieved 39 consecutive quarters of top-line growth and nine consecutive years of core earnings per share growth [20] Business Line Data and Key Metrics Changes - Nine out of ten product categories experienced organic sales growth, with Family Care and Personal Health Care growing mid-single digits, while Baby Care saw a decline in low single digits [20] - E-commerce sales increased by 12%, now representing 19% of total company sales [21] Market Data and Key Metrics Changes - Focus markets grew by 2%, with North America and Europe focus markets up by 2% and 3% respectively [21] - Enterprise markets also grew by 2%, led by a 4% organic sales growth in Latin America [21] Company Strategy and Development Direction - The company is focused on an integrated growth strategy that emphasizes performance across product, package, brand communication, and retail execution [23][24] - The strategy is dynamic, allowing the company to adapt to changing consumer needs and competitive environments while maintaining strong results [24] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the challenges posed by a volatile economic and geopolitical environment but remains confident in the company's strategy and ability to drive market growth [23][25] - The company is committed to increasing investment in its strategy to achieve growth and value creation objectives [24] Other Important Information - The Board of Directors declared a quarterly dividend of $1.0568 per share, marking the 69th consecutive annual dividend increase [19][22] - A shareholder proposal regarding flexible plastic packaging was presented but ultimately voted against by the Board [18][26] Q&A Session Summary Question: Has the company considered a stock split? - The company does not foresee splitting the stock as it believes growth in stock price reflects underlying business performance [27][28] Question: Do you plan to continue the virtual format for future annual meetings? - The virtual format allows for broader participation and is considered efficient [29] Question: How does the company view efforts to advance environmental sustainability? - Environmental sustainability is a foundational component of the company's strategy, with significant progress made in reducing waste and emissions [30][31] Question: What is P&G's approach to equality and inclusion? - The company believes that equality and inclusion enhance its ability to serve consumers and drive market growth [32] Question: What factors influence P&G's presence in markets with geopolitical conflicts? - The company prioritizes the health and safety of its employees and the availability of essential products in affected regions [34][35] Question: How does P&G's executive bonus program align with standard management bonus programs? - The company emphasizes pay for performance and long-term success across its compensation programs [36] Question: How does the company approach capital allocation? - The company prioritizes funding the business, paying dividends, considering strategic acquisitions, and returning cash to shareholders [37] Question: How is P&G remaining committed to growth in emerging markets? - Emerging markets represent about 20% of the company's business, and growth will be pursued responsibly [38] Question: How is the company navigating macroeconomic pressures? - The company focuses on delivering superior propositions to consumers while managing cost pressures through productivity programs [40] Question: How does the company ensure its products are better than competitors? - The company concentrates on performance across various aspects, including product quality and market execution [41] Question: How does P&G stay in touch with consumer and market trends? - The company relies on direct consumer feedback and external thought leaders to stay relevant [42]

Financial Data and Key Metrics Changes - Total revenue for Q2 2026 was $6.8 million, an increase from $6.4 million in the same period last year [24] - Product sales rose to $5.2 million from $4.9 million year-over-year, while franchise and royalty fees increased to $1.6 million from $1.5 million [24] - The total product and retail gross profit was negative $33,000, reflecting year-over-year comparability factors and timing of inventory adjustments [24] - The net loss was $0.7 million, or negative $0.09 per share, compared to a net loss of $0.7 million or negative $0.11 per share in Q2 2025 [24] Business Line Data and Key Metrics Changes - The company is focusing on franchise growth and operational improvements, with a new VP of Operations implementing cost-saving strategies [5][6] - The franchise development momentum is building, with renewed interest from existing and prospective operators [8][11] Market Data and Key Metrics Changes - The company is expanding its geographic footprint and exploring new markets, including areas with historically little presence [9] - The acquisition of a store in Camarillo, California, is expected to enhance market presence and profitability [17][18] Company Strategy and Development Direction - The company is transitioning from transformational planning to transformational performance, aiming for disciplined execution and long-term value creation [4][22] - A rebranding initiative is underway, modernizing customer touchpoints and enhancing the overall brand experience [11][12] - The company is focused on quality over quantity in franchise recruitment, targeting well-capitalized operators in high-traffic markets [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing operational challenges but is optimistic about returning to historic levels of profitability [5][21] - The company is well-positioned for the holiday season, with improved logistics and inventory management [20][21] - Management emphasizes a cultural shift towards a more accountable and results-oriented organization [20][22] Other Important Information - The company has made significant investments in technology and automation while maintaining its handcrafted legacy [7] - A new loyalty program is set to launch, aimed at enhancing customer engagement and understanding purchasing behavior [15][16] Q&A Session Summary Question: Background of the new Chief Operating Officer - The new COO, Luis Burgos, has over 30 years of experience in manufacturing and operations, including roles at Kimberly Clark [28] Question: Targets for new store openings in 2026 and 2027 - The company aims for net positive store growth annually, exceeding closures with new openings [29] Question: Discussion on owned versus franchised stores - The company believes owning stores helps them be better franchisors and plans to strategically acquire more stores for testing and development [30][32] Question: Cash burn and potential need for equity financing - The company does not expect to continue burning cash for the next 12 months, with Q3 and Q4 historically being stronger periods [33][35] Question: Increase in franchise demand beyond visual aspects - The company offers a low labor model and defined costs for new store builds, making it attractive for franchisees [40] Question: Changes in factory operations impacting costs - The new VP of Operations is implementing changes that are still being tested for best practices [42] Question: Impact of easing cocoa prices on margins - Cocoa prices have decreased significantly, which is expected to improve margins as chocolate constitutes 40% of raw material costs [44]