Financial Data and Key Metrics Changes - For Q4 2025, the company reported a GAAP net loss of $8.9 million, or $0.17 per share, and Distributable Earnings of approximately $0.00 per share [4][16] - The weighted average coupon of the loan portfolio decreased to 717 basis points from 777 basis points in the prior quarter, attributed to lower spreads on newly acquired loans and a decline in the SOFR benchmark rate [17] - Total operating expenses increased to $3.8 million from $3.1 million in the prior quarter, primarily due to one-time legal expenses [17][18] - The total book equity at the end of the quarter was approximately $219 million, with a total book value of common stock at approximately $159 million, or $3.03 per share, down from $3.25 per share [19] Business Line Data and Key Metrics Changes - The company acquired or funded $400 million of loan assets during Q4 2025, primarily for the LMNT 2025-FL3 transaction [21] - The total loan portfolio consisted of 61 floating rate loans with an aggregate unpaid principal balance of approximately $1.1 billion, with a weighted average floating rate of 333 basis points over SOFR [21] - Approximately 83% of the loans in the portfolio were risk graded as 3 or better, an improvement from 46% as of September 30 [22] Market Data and Key Metrics Changes - The U.S. economy remains resilient, though growth is moderating with increased uncertainty due to monetary policy and geopolitical risks [5][6] - Capital market conditions in commercial real estate have improved, with increased liquidity, although transaction activity remains below historical averages [6][8] - Rent growth in multifamily markets is modest but showing early signs of re-acceleration in supply-constrained areas [7] Company Strategy and Development Direction - The company remains focused on active asset management, resolving legacy positions, and maintaining a disciplined balance sheet management approach [14][15] - The strategy includes leveraging improved capital market conditions while being cautious and selective in capital deployment [15] - The company aims to navigate the current environment by focusing on strong credit fundamentals and risk-adjusted returns [15] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the uneven recovery in commercial real estate credit markets, indicating that it may take time to fully normalize [14] - The company is optimistic about the multifamily market's strength and is focused on asset management and capital deployment [29][30] - Management highlighted the importance of evaluating sponsor and market conditions when considering new capital deployment [29][30] Other Important Information - The company ended 2025 with an unrestricted cash balance of $23 million, indicating a strong liquidity position to support portfolio management [19][14] - The LMNT 2025-FL3 CLO transaction was a significant development, providing effective leverage of 88% at a weighted average cost of funds of SOFR + 191 basis points [19][11] Q&A Session Summary Question: Context on risk, reward, and opportunity for new capital deployment - Management acknowledged the challenges posed by the current market environment but emphasized the strength of the multifamily market and the importance of evaluating sponsor and market conditions [29][30] Question: Updated comfort zone for leverage with the new CLO - Management noted that average leverage at the asset level has declined compared to historical norms, with current leverage remaining stable [33][34] Question: Balance of non-accruals at year-end and their impact on earnings - Non-accruals amounted to $102 million, with a drag on earnings of about $0.02 [38] Question: Path to dividend coverage for the year - Management indicated that achieving dividend coverage would require both cleaning up the existing portfolio and portfolio growth [39][40] Question: Insights on Q1 2026 - Management highlighted a focus on asset management and the resolution of legacy assets, with expectations aligned with their plans [45][46]

Financial Data and Key Metrics Changes - The company reported a cash and cash equivalent position of $93 million as of December 31, 2025, with short-term liquidity estimated at approximately $85 million [32] - Anticipated spending over the next 12 months is projected to be around $190 million to $200 million, which includes costs for manufacturing and assembly of the first Valo aircraft [33][66] - The annual spend for fiscal year 2025 was in line with guidance of $110 million to $125 million, which is a fraction of what main competitors spent [32] Business Line Data and Key Metrics Changes - The Valo aircraft is positioned as the highest quality EVTOL aircraft in development globally, with unique features such as a roomy cabin and modular architecture [11][12] - The company plans to be a leader in the hybrid electrics defense space, with ongoing discussions with militaries worldwide [13][14] Market Data and Key Metrics Changes - The company is actively participating in government-backed programs in the UK and Europe to support the introduction of eVTOL technologies, including the Future Flight Challenge [24] - The market is ready for safe, quiet, zero emissions urban air mobility, with significant enthusiasm from airline partners and stakeholders [9] Company Strategy and Development Direction - The company is focused on executing a clear pathway from prototype to pre-production, certification, and full-scale production [24] - The battery technology is highlighted as a key differentiator, with plans to expand battery manufacturing capabilities through a new facility [28][30] - The company is exploring various capital raising options and will execute when it is the right time for the business [10][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress of flight testing and certification, emphasizing a disciplined approach to safety and regulatory compliance [34][80] - The company is optimistic about the defense market opportunities, particularly in light of current geopolitical situations [48][70] Other Important Information - The company has completed almost 100% of its stated milestones for 2025, with the final milestone being the transition flight [30] - The company is set to host an investor day at the Vertical Energy Centre in July, coinciding with the Farnborough Airshow [28] Q&A Session Summary Question: Is there a credible likelihood of meaningful state financial support from the UK? - Management confirmed tremendous support from the UK government, amounting to around $100 million, and expressed commitment to remaining based in the UK despite interest from other countries [36][37] Question: Are there any regulatory hurdles remaining for the pilot of full transition? - Management indicated that the remaining tests are in the tail end of the S-curve, with weather being a significant factor affecting flight testing [40][41] Question: What is the status of strategic discussions? - Management stated that ongoing conversations with strategic partners are expected to deepen following the successful transition [44] Question: What is the timeline for the hybrid military aircraft? - Management noted that the hybrid product is unique and anticipated to be certified by 2029, with significant interest from military customers [49][68] Question: How has the selection of Evolito as the EPU supplier been received? - Management expressed confidence in Evolito's certification processes and technology, viewing it as a positive fit for the Valo aircraft [96][97]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a GAAP net loss of $8.9 million, or $0.17 per share, and distributable earnings of approximately $0.00 per share [4][16] - The weighted average coupon of the loan portfolio declined to 717 basis points from 777 basis points in the prior quarter [17] - Total operating expenses increased to $3.8 million from $3.1 million in the previous quarter, primarily due to one-time legal expenses [17][18] - The total book equity at the end of the quarter was approximately $219 million, with a total book value of common stock at approximately $159 million, or $3.03 per share, down from $3.25 per share [19] Business Line Data and Key Metrics Changes - The company acquired or funded $400 million of loan assets during Q4, primarily for the LMNT 2025-FL3 transaction [21] - The total loan portfolio consisted of 61 floating rate loans with an aggregate unpaid principal balance of approximately $1.1 billion [21] - Approximately 83% of the loans in the portfolio were risk graded as 3 or better, an improvement from 46% as of September 30 [22] Market Data and Key Metrics Changes - The U.S. economy remains resilient, though growth is moderating with increased uncertainty due to monetary policy and geopolitical risks [5][6] - Capital market conditions in commercial real estate have improved, but transaction activity remains below historical averages [6] - In multifamily, fundamentals are stabilizing, with rent growth showing early signs of re-acceleration in supply-constrained markets [7] Company Strategy and Development Direction - The company remains cautious and selective in capital deployment, focusing on strong credit fundamentals and risk-adjusted returns [15] - Active asset management is a top priority, with efforts to resolve legacy positions and enhance long-term value [8][9] - The company has entered into financing agreements to support its investment strategy, including a $450 million borrowing capacity with JPMorgan Chase [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while the recovery in commercial real estate credit markets is uneven, improving conditions are encouraging [14] - The company expects a market characterized by selectivity, with outcomes differentiated by asset quality and capital structure [14] - Management is focused on resolving legacy assets and redeploying capital into performing loans [46] Other Important Information - The company ended 2025 with an unrestricted cash balance of $23 million, indicating a strong liquidity position [19] - The LMNT 2025-FL3 CLO transaction was fully deployed, providing effective leverage of 88% at a weighted average cost of funds of SOFR + 191 basis points [19] Q&A Session Summary Question: Context on risk, reward, and opportunity for new capital deployment - Management acknowledged that the current market environment presents challenges but remains confident in the strength of the multifamily market [28][29] Question: Updated comfort zone for leverage with the new CLO - Management indicated that average leverage at the asset level has declined compared to historical norms, with few assets exceeding 80% [32][34] Question: Balance of non-accruals at year-end and their impact on earnings - Non-accruals at year-end totaled $102 million, with a drag on earnings of about $0.02 [38] Question: Path to dividend coverage this year - Management stated that achieving dividend coverage will likely require both cleaning up the existing portfolio and portfolio growth [39][40] Question: Insights on Q1 2026 - Management emphasized the focus on asset management and the resolution of legacy assets, with progress moving according to plan [45][46]

Financial Data and Key Metrics Changes - Core & Main reported net sales of $7.65 billion for fiscal 2025, reflecting a 3% increase year-over-year, with a 5% growth when adjusted for one less selling week [33][34] - Adjusted EBITDA for the year was $931 million, slightly ahead of the prior year, while adjusted EBITDA margin declined 30 basis points to 12.2% [35] - Adjusted diluted EPS increased by 7% to $2.97, driven by lower interest expenses and a reduced share count from share repurchases [35] Business Line Data and Key Metrics Changes - Municipal projects accounted for 44% of sales, with low to mid-single-digit growth, while non-residential sales were relatively flat, and residential lot development declined low double digits [5][10][34] - Average daily net sales for meter products grew by 12% in the fourth quarter and mid-single digits for the year, following a strong prior year growth comparison of 32% [12][33] - The company achieved 3 points of organic above-market growth in fiscal 2025, driven by sales initiatives and geographic expansion [12][34] Market Data and Key Metrics Changes - The addressable market for Core & Main is estimated at $44 billion, up approximately $5 billion from the previous year, with the U.S. market share at around 20% [6][7] - The company expects overall end markets to remain roughly flat for the year, with municipal demand providing stability amid uncertainties in the private construction market [38][40] Company Strategy and Development Direction - Core & Main aims to extend its competitive advantages, compound market share gains, and expand structural earnings power [15][40] - The company is focusing on investments in smart metering, treatment plants, and geographic expansion to drive above-market growth [19][22] - Acquisitions and greenfield openings are key strategies for expanding the company's footprint and unlocking new growth opportunities [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the municipal market due to stable funding sources, while remaining cautious about the private construction market amid geopolitical volatility and interest rate uncertainties [38][40] - The company anticipates a return to growth in residential markets to address the significant undersupply of housing in the U.S. [11][17] Other Important Information - The company generated $650 million of operating cash flow during the year, reflecting a conversion rate of approximately 70% from adjusted EBITDA [36] - Core & Main returned $155 million to shareholders through share repurchases during the year, reducing the share count by roughly 3.2 million [36] Q&A Session Summary Question: Growth disconnect of Core & Main versus competitors - Management acknowledged differences in market presence and product mix, noting strong share growth in smart metering and treatment plants, while recognizing competitors' advantages in certain markets [43][44][45] Question: Cost out program and its impact - Management confirmed that the $30 million cost out program was completed in FY 2025, with benefits expected to materialize in the first half of FY 2026 [48][49] Question: Current market conditions and commodity inflation - Management is monitoring the impact of geopolitical events on fuel and resin prices, indicating potential price increases in certain product categories [53][54][55] Question: Growth investments in data centers and treatment plants - The company plans to invest in additional resources for treatment plant projects, enhancing capabilities to win larger contracts [58][61] Question: EBITDA guidance and its components - Management provided insights on the guidance range, emphasizing the importance of pricing stability and potential inflation impacts on SG&A [66][70] Question: M&A strategy and future expectations - Management expressed confidence in the M&A pipeline, anticipating a return to a more normalized cadence of acquisitions in the coming years [72][74] Question: Growth expectations for the meters business - The meters business is expected to continue delivering low double-digit growth, supported by a strong pipeline of large projects [77][80]

Financial Data and Key Metrics Changes - The company reported revenue of approximately $2.5 billion, an increase of 1.9% on a constant currency basis and over 5% on a reported basis [9] - Non-GAAP operating income was $295 million, and adjusted EBITDA was $348 million, with a margin of 13.9% [10] - Non-GAAP diluted EPS was $2.61, in line with guidance [10] - Adjusted free cash flow was negative $145 million due to an increase in accounts receivable [11] Business Line Data and Key Metrics Changes - Revenue from banking and financial services clients grew 13% year-over-year [9] - Revenue from retail, travel, and e-commerce clients grew 6%, driven by travel and e-commerce [9] - Media and communications revenues grew 3%, primarily from clients outside the U.S. [9] - Technology and consumer electronics verticals decreased about 6% due to lighter volumes and onshore mix [9] Market Data and Key Metrics Changes - The company experienced a solid demand environment, with a strong pipeline of opportunities [17] - The trend towards moving work offshore continues, impacting revenue and margins [31] - The geopolitical situation has had minimal impact on client behavior, with exposure to geopolitical risks being about 1% of revenue [54] Company Strategy and Development Direction - The company is focused on securing complex work and high-value services, leveraging proprietary AI technologies [7] - There is a commitment to reducing net leverage to below 2.6 times adjusted EBITDA by the end of fiscal 2026 [17] - The company aims to drive long-term revenue and margin growth through strategic investments [8] Management's Comments on Operating Environment and Future Outlook - Management expects sequential margin expansion in the second half of 2026, driven by cost actions and additional revenue [26] - The overall demand environment remains solid, with confidence in year-over-year profitability growth in the second half of 2026 [17] - Management is optimistic about achieving historical margin levels as transformational deals reach full scale [46] Other Important Information - The company returned approximately $65 million to shareholders, including share repurchases and dividends [12] - The company issued $600 million of 3-year senior notes to retire existing debt [13] Q&A Session Summary Question: Revenue related to AI and iX suite - Management indicated that the iX Hello solution is priced by consumption, leading to negative margins initially but positive margins as it scales [20] - The iX Hero product is sold on a per-seat subscription basis, with expectations to reach or exceed $100 million in ARR by the end of the fiscal year [22] Question: Margin improvement cadence - Management expects margins to be compressed in the first half, with sequential expansion in the second half driven by cost actions and additional revenue [26] Question: Impact of offshore movement on revenues - Approximately 15% of revenue is delivered from North America and Western Europe, with a 2-point headwind from onshore movement expected [31] Question: Philosophy behind divestitures - The divestitures were of small, non-strategic businesses that were not growing or accretive to margins, with no imminent plans for further divestitures [37] Question: Performance of healthcare and tech verticals - Healthcare saw lighter volumes due to changes in Medicare membership, while tech and consumer electronics faced underlying volume declines and automation impacts [40]

Financial Data and Key Metrics Changes - The company reported revenue of approximately $2.5 billion, an increase of 1.9% on a constant currency basis and over 5% on a reported basis [9] - Non-GAAP operating income was $295 million, and adjusted EBITDA was $348 million, with a margin of 13.9% [10] - Non-GAAP diluted EPS was $2.61, in line with guidance [10] - Adjusted free cash flow was negative $145 million, reflecting an increase in accounts receivable [11] Business Line Data and Key Metrics Changes - Revenue from banking and financial services clients grew 13% year-over-year, while retail, travel, and e-commerce clients grew 6% [9] - Media and communications revenues grew 3%, primarily from clients outside the U.S. [9] - Technology and consumer electronics verticals decreased about 6%, attributed to lighter volumes and onshore mix [9] Market Data and Key Metrics Changes - The company experienced strong demand in banking and financial services, with broad-based success across various client types [47] - E-commerce and travel sectors showed sustainable growth, driven by new solutions and consolidation of services [50] Company Strategy and Development Direction - The company is focused on securing complex work and high-value services, leveraging proprietary AI technologies to differentiate in the market [7] - There is an emphasis on managing costs and investing in higher growth areas, with expected annualized savings of approximately $40 million from restructuring actions [11][16] - The company aims to reduce net leverage to below 2.6x adjusted EBITDA by the end of fiscal 2026 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the overall demand environment and the ability to drive year-over-year profitability growth in the second half of 2026 [16] - The geopolitical situation has had minimal impact on client behavior, with exposure to geopolitical risks being about 1% of revenue [53] - Management expects sequential margin expansion in the second half of the year, driven by cost actions and additional revenue coming online [25][26] Other Important Information - The company returned approximately $65 million to shareholders, including share repurchases and dividends [12] - The company issued $600 million of 3-year senior notes to manage debt maturities [13] Q&A Session Summary Question: Revenue related to AI and iX suite - Management indicated that the iX Hello solution is priced by consumption, leading to initial negative margins that turn positive as scale increases [19] - The iX Hero product is sold on a per-seat subscription basis, with expectations to reach or exceed $100 million in annual recurring revenue by the end of the fiscal year [20] Question: Margin improvement cadence - Management expects margins to be compressed in the first half, with sequential expansion in the second half driven by cost actions and additional revenue [25] Question: Impact of offshore movement on revenues - Approximately 15% of revenue is delivered from North America and Western Europe, with a projected 2-point headwind from onshore movement [29] Question: Divestitures of non-strategic businesses - The divestitures were opportunistic, with no immediate plans for further portfolio pruning [36] Question: Stability of banking and retail growth - Management expects sustained growth in banking and retail, driven by complex work and new solutions [47][50]

Financial Data and Key Metrics Changes - The company ended 2025 with approximately $292.3 million in cash and marketable securities, remaining debt-free with about 31.3 million shares outstanding [32][33] - Q4 2025 net product revenues were approximately $1.6 million, with over 20,000 monthly paid and filled prescriptions [33] - Total Q4 operating expenses were approximately $40 million, with a net cash burn of about $32 million [34][35] - The net loss per share in Q4 2025 was $1.16, compared to a net loss per share of $0.46 in Q4 2024 [37] Business Line Data and Key Metrics Changes - The company sold over 45,000 boxes of LNZ100, prescribed by more than 10,000 eye care professionals, indicating strong adoption [7][26] - The product is showing encouraging refill behavior, with patients moving from one-month to three-month prescriptions [48][76] Market Data and Key Metrics Changes - Presbyopia affects approximately 128 million people in the United States, representing a significant market opportunity for the company [6][18] - The company is seeing a broad base of prescribing physicians, with over 55% of ECPs having written VIZZ multiple times [21][22] Company Strategy and Development Direction - The company aims to build a new treatment category for presbyopia, focusing on accelerating adoption through enhanced physician messaging and expanding the sales force [12][19] - The direct-to-consumer campaign launched in January is expected to take at least two quarters to translate into prescription trends, with early indicators showing positive engagement [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the product's effectiveness and the encouraging early signals of patient persistence, indicating a strong foundation for future growth [16][42] - The company is focused on executing its strategy to build a blockbuster category, leveraging both physician and consumer adoption [16][42] Other Important Information - The company plans to maintain a significant portion of its operating expenses towards sales and marketing, targeting approximately 75%-80% [39] - The company is advancing its global expansion strategy, with potential approvals in multiple geographies anticipated in early 2027 [40][41] Q&A Session Questions and Answers Question: Can you discuss the sampling dynamic to NRX and retention? - Management feels good about the NRX and refill dynamic, noting that patients who purchase continue to use the product, with encouraging refill rates observed [46][48] Question: What investments are being made to broaden patient demand? - The focus is on digital advertising and optimizing media placements to effectively reach target demographics, with a selective approach to linear TV advertising in key markets [50][51] Question: What percentage of prescribers are from the initial target group versus inbounds from patient demand? - The company has expanded its target group from 12,000 to 15,000 ECPs, with many new prescribers being those who had never written Vuity before [53][54] Question: Can you provide insights on the behavior of the top 1,000 prescribers? - The top prescribers are more comfortable with new technologies and have successfully integrated VIZZ into their patient discussions, setting appropriate expectations for its use [59][63]

Financial Data and Key Metrics Changes - The company's top-line revenue increased by 46.7% to approximately RMB 5.94 billion [4][38] - Gross profit grew by 72.5% year-over-year, reaching slightly below RMB 2.14 billion [4][38] - Adjusted net profit rose by close to 70% year-over-year, reaching around RMB 1.6 billion, with an adjusted net profit margin increasing from 22.6% in 2024 to 26.2% in 2025 [4][39][40] Business Line Data and Key Metrics Changes - The company signed a record 70 new ICMC projects in 2025, a significant increase from previous years [4][12] - Active CMC projects reached 252 by the end of 2025, while total PPQ projects reached 18 [4][12] - The backlog grew to nearly $1.5 billion, representing over 50% year-over-year growth [5][45] Market Data and Key Metrics Changes - The company expanded its market share to over 24% by the end of 2025, up from 21.7% in 2024 [6][16] - Revenue from overseas clients, particularly in the U.S., accounted for 51% of total revenue in 2025 [40] - The company continues to serve 14 of the top 20 pharmaceutical companies, with revenue from pharma clients making up 32% of total revenue [16] Company Strategy and Development Direction - The company is focusing on expanding its commercial manufacturing capabilities, particularly in linker-payloads, with significant investments planned for the Jiangyin site [30][34] - The acquisition of BioDlink is expected to enhance operational synergies and expand the company's capacity [36][37] - The company aims to maintain a compound annual growth rate (CAGR) of 30%-35% over the next few years, driven by innovations in ADC and XDC modalities [55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the ADC and XDC industries, anticipating a wave of new product approvals and commercial projects in the coming years [49][55] - The company is optimistic about the integration of BioDlink and the ramp-up of the Singapore facility, which are expected to contribute to revenue growth [60][94] - Management noted that the global supply situation for ADCs remains tight, indicating strong demand for their services [82] Other Important Information - The company achieved mechanical completion of its Singapore site in June 2025, with GMP release expected in the first half of 2026 [9][33] - The company has made significant advancements in innovation, particularly in linker-payload technologies, which are expected to enhance client offerings [22][29] Q&A Session Summary Question: Outlook for 2026 revenue and earnings growth - Management expects consolidated CDMO revenues to maintain a growth rate around 35% for 2026, despite potential margin dilution from the integration of BioDlink and the ramp-up of the Singapore facility [61][62] Question: Expectation of IP income in 2026 - Management indicated that while licensing income is not regularly predictable, ongoing R&D investments may lead to more licensing deals in the future [65][66] Question: Backlog composition and commercial ramp-up - Management acknowledged that most of the backlog consists of early-stage projects, with expectations for a gradual shift towards more commercialized projects in the coming years [70][72] Question: Global ADC supply and competitive landscape - Management believes that the global supply situation remains tight, with demand outpacing new capacity additions from competitors [82] Question: BioDlink's biosimilar business and backlog integration - Management confirmed that BioDlink's biosimilar business is being phased out, and existing contracts will be honored before signing new ones [88] Question: AI applications in early-stage drug discovery - Management noted that AI applications in drug discovery are still in early stages, with ongoing monitoring of developments in this area [89]

Financial Data and Key Metrics Changes - The company's top-line revenue increased by 46.7% to approximately RMB 5.94 billion [4][38] - Gross profit grew by 72.5% year-over-year to slightly below RMB 2.14 billion, with gross profit margin rising from 30.6% to 36% [4][39] - Adjusted net profit increased by 69.9% to around RMB 1.6 billion, with adjusted net profit margin rising from 22.6% to 26.2% [4][40] Business Line Data and Key Metrics Changes - The company signed a record 70 new ICMC projects and 10 new PBQ projects in 2025, with active CMC projects reaching 252 [4][12] - ADCs accounted for approximately 90% of overall revenue, while XDC contributed around 7% [39] - The backlog grew to nearly $1.5 billion, representing over 50% year-over-year growth [5][45] Market Data and Key Metrics Changes - The company expanded its market share to over 24% by the end of 2025, up from 21.7% in 2024 [6][16] - Revenue from overseas markets, particularly the U.S., accounted for 51% of total revenue in 2025, with North America and Europe collectively contributing 85% [40][41] - China’s revenue represented 15% of overall revenue, primarily from early-stage projects [42] Company Strategy and Development Direction - The company aims to maintain a compound annual growth rate (CAGR) of 30%-35% over the next few years, driven by commercial opportunities and manufacturing capabilities [55] - Significant investments are planned for linker payload commercial supply capacity, particularly at the Jiangyin site [30][34] - The company is focusing on expanding its global footprint, including acquisitions and new facilities in China and Singapore [31][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong growth momentum in the ADC and XDC industries, with expectations for multiple BLA submissions in the coming years [55][56] - The integration of BioDlink is anticipated to bring operational synergies and enhance capacity [56] - The company is optimistic about the commercial opportunities arising from innovations in linker-payload technology [57] Other Important Information - The company received two prestigious awards at the World ADC Awards, including Best CDMO and Best CRO [10] - The total client number increased to over 640, with 14 of the top 20 pharmaceutical companies as clients [16] Q&A Session Summary Question: Outlook for 2026 revenue and earnings growth - Management expects consolidated revenue growth around 35% for 2026, despite potential margin dilution from BioDlink integration and Singapore ramp-up [61][62] Question: Expectation of IP income in 2026 - Licensing income is not factored into guidance due to its irregular nature, but ongoing R&D investments may lead to more licensing deals in the future [65][66] Question: Backlog composition and commercial ramp-up - Most contracts are still in preclinical or clinical stages, with expectations for a gradual shift towards more commercialized projects in the coming years [70][72] Question: Global ADC supply and competitive landscape - The company believes that demand for ADCs will outpace new capacity from competitors, maintaining a tight supply situation [82] Question: BioDlink's biosimilar business and backlog integration - The biosimilar business is being terminated, and existing contracts will be honored before signing new ones [88] Question: AI applications in early-stage drug discovery - The company is monitoring AI developments in drug discovery but considers it still in early stages [90] Question: Update on Singapore site and revenue contribution - The Singapore site is expected to contribute minimally in 2026, focusing on building backlog rather than immediate execution [95]

Financial Data and Key Metrics Changes - The company reported revenue of approximately $2.5 billion, an increase of 1.9% on a constant currency basis and over 5% on a reported basis [9] - Non-GAAP operating income was $295 million, with adjusted EBITDA at $348 million, reflecting a margin of 13.9% [10] - Non-GAAP diluted EPS was $2.61, consistent with previous guidance [10] - Adjusted free cash flow was negative $145 million, attributed to an increase in accounts receivable [11] Business Line Data and Key Metrics Changes - Revenue from banking and financial services clients grew 13% year-over-year, while retail, travel, and e-commerce clients saw a 6% increase [9] - Media and communications revenues grew 3%, primarily from clients outside the U.S. [9] - Technology and consumer electronics verticals decreased by about 6%, driven by lighter volumes and onshore mix [9] Market Data and Key Metrics Changes - The company experienced strong demand in the banking sector, with expectations of high single-digit to low double-digit growth throughout the year [47] - E-commerce and travel sectors are performing well, with sustainable growth driven by new client acquisitions and technology solutions [49] Company Strategy and Development Direction - The company is focused on securing complex work and high-value services, leveraging proprietary AI technologies to differentiate in the market [7] - There is an emphasis on driving internal efficiencies to fuel investment in new growth areas [7] - The company aims to reduce net leverage to below 2.6x adjusted EBITDA by the end of fiscal 2026 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the overall demand environment and the ability to manage margin headwinds [16] - The company anticipates sequential profitability growth in the second half of 2026 due to cost actions and revenue growth [11][16] - Management noted that geopolitical issues have had minimal impact on client behavior so far [53] Other Important Information - The company returned approximately $65 million to shareholders, including share repurchases and dividends [12] - The company issued $600 million of 3-year senior notes to retire existing debt, with a focus on managing upcoming debt maturities [13] Q&A Session Summary Question: Revenue related to AI and iX suite - Management indicated that the iX Hello solution is priced by consumption, leading to negative margins initially but positive margins as it scales [19] - The iX Hero product operates on a subscription basis, with expectations to exceed $100 million in annual recurring revenue by the end of the fiscal year [20] Question: Margin improvement cadence - Management expects margins to be somewhat compressed in the first half, with sequential expansion in the second half driven by cost actions and additional revenue [25] Question: Impact of offshore movement on revenues - Approximately 15% of revenue is delivered from North America and Western Europe, with a projected 2-point headwind from onshore movement [29] Question: Divestitures of non-strategic businesses - The divestitures were opportunistic, with no immediate plans for further portfolio pruning [36] Question: Performance of healthcare and technology verticals - Healthcare revenues were impacted by changes in Medicare membership, while technology revenues were affected by lighter volumes and automation [38][40]