Financial Data and Key Metrics Changes - For Q4 2025, diluted earnings per share increased by 23% year-over-year, while for the full year, it grew by 25% year-over-year [7] - Total operating revenue and other income rose by 107% year-over-year to $734 million in Q4, driven by the Mercury acquisition and increased managed receivables [12] - Net income attributable to common shareholders increased approximately 25% year-over-year to $32.8 million in Q4, equating to $1.75 per diluted share [15] Business Line Data and Key Metrics Changes - Managed receivables increased by 37% year-over-year, with new account originations rising by 73% to over 2.2 million for the year [8] - Purchase volume increased by 54% for Q4 year-over-year and by 32% for the full year [8] - The company acquired a $165 million retail credit portfolio from a competitor, enhancing its position in the second look point-of-sale market [7] Market Data and Key Metrics Changes - The company serves approximately 6 million customers, up from 1.2 million five years ago, reflecting a 38% annual growth rate [10] - Return on average equity remained above 20%, even with significant cash reserves of over $600 million at year-end [7] Company Strategy and Development Direction - The acquisition of Mercury Financial effectively doubled the company's balance sheet to approximately $7 billion, enhancing its scale and capabilities [4] - The company aims for long-term earnings growth of 20% or more annually while maintaining returns on average equity of 20% or greater [11] - The integration of Mercury is expected to yield significant long-term earnings accretion through disciplined portfolio management and cost savings [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of consumer behavior, noting consistent payment performance and stable delinquency trends [8] - The competitive landscape remains robust, with record solicitations leading to some softening in response rates and marketing efficiency [9] - Management anticipates a robust tax season, which may lead to a temporary slowdown in growth but will ultimately reduce delinquencies [31] Other Important Information - The company has a diversified funding structure, including partnerships with banks, life insurance companies, and access to the securitization market [25] - Management is considering the potential for applying for bank charters as part of its funding strategy [26] Q&A Session Summary Question: Integration progress of Mercury - Management confirmed that the integration is ahead of schedule, with significant changes in portfolio terms already implemented [19][20] Question: Funding structure and macro concerns - Management stated that funding partners remain supportive, and there has been no deterioration in market conditions for securitization [25] Question: Tax refund season implications - Management expects a robust tax season, which may lead to paydowns affecting balances but ultimately reducing delinquencies [31] Question: Customer concentration management - Management highlighted a diversified merchant base and strong underwriting practices to mitigate concentration risks [35] Question: Fair value mark insights - Management explained that the fair value mark was conservative due to the nature of newly acquired receivables and the Mercury portfolio [47][48]

Financial Data and Key Metrics Changes - In Q4, the company delivered $18.3 million in bookings, near the high end of the guided range, with strong contributions from IP products and TCAD solutions [14] - Revenue reached $18.3 million in the quarter, above the high end of the guided range, with TCAD and IP revenue growing 34% and almost 3x respectively [14][15] - GAAP gross margin in Q4 was 83.3%, and non-GAAP gross margin was 85.6%, reflecting a sequential increase of roughly five full points [15] - GAAP operating loss improved to a $6.8 million loss, while non-GAAP operating loss was just over $1 million, ahead of expectations [17][18] Business Line Data and Key Metrics Changes - TCAD bookings increased 70% sequentially to $9.2 million, driven by the adoption of the AI-driven FTCO solution [6][14] - The semiconductor IP business delivered record revenue and bookings of over $5 million, significantly boosted by the Mixel acquisition [7][14] - EDA bookings and revenue saw a significant decline in Q4, with bookings just under $4 million and revenue of $4.4 million [9][15] Market Data and Key Metrics Changes - The APAC region contributed significantly to growth, accounting for 57% of total revenue in Q4, driven by the FTCO solution [15] - The MIPI PHY market is valued at over $300 million per year, with the company holding a relatively modest share [7] Company Strategy and Development Direction - The company is focused on accelerating its AI-driven solutions, particularly in semiconductor manufacturing process development, which is expected to be a long-term growth driver [5][12] - The restructuring efforts have led to improved gross margins and increased R&D capacity, with a commitment to reducing annualized non-GAAP operating expenses by at least $20 million [17][19] - The company anticipates steady growth in the IP business, with expectations for significant growth in TCAD as contract renewals increase [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround plan, noting that the execution is ahead of expectations and positioning the company for a faster recovery [4][12] - The company expects to approach operating cash flow breakeven in Q2 and achieve positive operating cash flow in Q3 [18][19] - Management highlighted the importance of AI in transforming semiconductor manufacturing processes and improving operational efficiencies [12][24] Other Important Information - The company has seen a significant increase in interest and adoption of its AI solutions, indicating a positive trend for future growth [5][6] - The company is committed to maintaining financial discipline while focusing on key growth opportunities to set the stage for profitable growth [19] Q&A Session Summary Question: Growth priorities and execution - Management highlighted the need for financial flexibility and successful execution of cost reduction programs, leading to improved morale and focus on new opportunities [22][24] Question: Revenue recognition for FTCO deal - A significant portion of the FTCO revenue was recognized in Q4, with the remainder to be recognized over the contract term [28] Question: Bookings expectations by segment - Continued strength in TCAD is expected in Q1, with IP remaining stable and EDA anticipated to be flat sequentially [36] Question: Acceleration of orders from older customers - The pipeline for TCAD growth is expected to be strong in 2026, with a focus on selling the value of new process development paradigms [42] Question: Growth from Mixel acquisition - The company anticipates double-digit revenue growth in the current calendar year, driven by the Mixel acquisition and strong TCAD performance [51][52]

Financial Data and Key Metrics Changes - In 2025, the company achieved full-year profitability in airline operations, defined as positive Adjusted EBITDA, marking a significant operational improvement [20][25] - Full-year revenue for 2025 was $106.6 million, an 11% decrease compared to 2024, driven by a 15% decrease in scheduled service revenue, partially offset by a 3% increase in on-demand charter revenue [23][24] - The Adjusted EBITDA loss for 2025 was $41.7 million, a 5% improvement over the previous year's loss of $44.1 million [25] Business Line Data and Key Metrics Changes - The airline operations achieved profitability for the full year of 2025, with controllable completion factors improving to 98% in Q4 2025 from 89% in Q4 2024 [25][26] - The on-demand charter business saw revenue increase and improved flight margins year-over-year, driven by better sourcing discipline and a shift to longer-haul trips with larger aircraft [9][20] - In Q4 2025, on-demand charter revenue increased by 36% year-over-year, while scheduled service revenue decreased by 19% [23][24] Market Data and Key Metrics Changes - The company is focusing on the Hawaii market as a strategic anchor for demonstrating electric aircraft technologies, committing over $22 million to enhance infrastructure and operations [13][14] - The partnership with BETA Technologies aims to introduce electric aircraft into service, with plans for cargo operations starting in 2026 [14][16] Company Strategy and Development Direction - The company is transitioning from an airline-first model to a platform-centric business, emphasizing the integration of electric aircraft and AI-enabled software [30][31] - The strategic partnership with BETA Technologies is expected to enhance operational efficiencies and profitability through the introduction of electric aircraft [14][16] - The company plans to commercialize its SurfOS technology in 2026, targeting enterprise clients and expanding its software offerings [11][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to lead the next structural transformation in aviation, with a focus on partnerships and electric aircraft collaborations [18][30] - The outlook for 2026 includes anticipated revenue growth of 20%-30% year-over-year, driven by the on-demand charter business and the rollout of SurfOS [28][29] Other Important Information - The company raised over $100 million in equity in 2025 to reduce overall cost of capital and lower net debt, which decreased by 47% to $74 million [4][22] - The company has secured a strategic partnership with BETA Technologies to be the first operator to launch commercial electric aircraft passenger flights in Hawaii [14][16] Q&A Session Summary Question: Clarification on SurfOS spending and commercialization - Management clarified that SurfOS remains a significant investment priority, with a focus on developing BrokerOS and targeting enterprise clients for customized solutions [34][36] Question: Timeline for BETA aircraft integration - Management indicated that the CTOL variant of BETA aircraft will be prioritized for certification and commercial service, with plans for cargo operations in 2026 [37][38] Question: Improvement in economics from BETA aircraft - Management anticipates a 30% reduction in operating costs due to lower fuel and maintenance expenses with the new electric aircraft [39][41] Question: Balance sheet outlook at the end of 2026 - Management noted that significant investments will be made in 2026, but they expect to refine the balance sheet over time to support growth [42][43] Question: Airline operations and future profitability - Management highlighted the importance of technology and electric aircraft adoption for improving profitability in airline operations [46][48] Question: Growth of on-demand charter segment - Management confirmed that the on-demand charter business is the fastest-growing segment, contributing significantly to raised revenue guidance [70][71]

Financial Performance Highlights - The company reported record collections of $245 million, an increase of 41% year-over-year [3][4] - Revenue for the quarter reached $155 million, up 30% compared to the prior year [4][17] - Adjusted EPS for the quarter was $0.69, with adjusted pre-tax income of $51 million, reflecting a 15% year-over-year increase [4][18] - The Cash Efficiency Ratio for the quarter was 71%, driven by strong collections from the Conn's portfolio purchase [4][16] Business Line Performance - Collections from the Conn's portfolio contributed $36 million for the quarter, while the Bluestem portfolio added $14 million [10] - The company achieved record deployments of $381 million, up 6% from the previous year [3][12] - Estimated remaining collections reached $3.4 billion, a 23% increase year-over-year [4][13] Market and Economic Context - Delinquency trends remain elevated across non-mortgage consumer asset classes, creating favorable portfolio supply conditions [5][7] - Personal savings levels have decreased to $831 billion, significantly lower than pre-pandemic averages, indicating limited consumer ability to absorb financial hardships [6] - The insolvency market has seen an increase in the number of insolvencies, fueling supply for insolvency portfolios [6][7] Company Strategy and Competitive Position - The company aims to maintain a strong focus on deploying capital for portfolio purchases at attractive risk-adjusted returns [20][22] - The company has improved its operational efficiency and has a robust funding structure, positioning it well for future opportunities [9][20] - The company intends to remain disciplined and opportunistic in M&A activities while focusing on organic growth [22] Management Commentary on Future Outlook - Management expressed confidence in the investment opportunity, citing favorable trends in consumer delinquencies and charge-offs [7][8] - The company anticipates that the Bluestem portfolio will significantly contribute to financial results in 2026 [4][19] - Management noted that the current economic environment is likely to be a net positive for supply-side opportunities [27][28] Other Important Information - The company completed a follow-on offering that improved liquidity and reduced ownership concentration [3] - A quarterly dividend of $0.24 per share was declared, representing a 4.7% annualized yield [22] - The company repurchased 3 million shares as part of a tactical strategy to support the follow-on offering [22] Q&A Session Summary Question: Thoughts on macro uncertainties affecting purchasing environment - Management indicated that while energy costs and employment changes may impact delinquencies, they do not foresee significant effects on liquidation rates [27][28] Question: Trends among sellers regarding forward flow deals - Management noted that about half of deployments have historically been in forward flows, but they do not target a specific percentage [30] Question: Expected efficiency ratio trends with portfolio changes - Management expects a substitution effect as the Conn's portfolio runs off, but anticipates maintaining a strong efficiency ratio through ongoing improvements [36] Question: Insights on supply increase and return profiles - Management stated that supply levels have been stable, and return profiles remain attractive with consistent pricing [48] Question: Characteristics of deployments and market shifts - Management highlighted an increase in deployments in insolvencies and noted that their geographic and asset class diversification continues to yield attractive returns [56] Question: Legal channel performance and profitability - Management confirmed that the volume of legal accounts aligns with underwritten expectations, and the growth in legal channel activity is consistent with their forecasts [93]

Financial Data and Key Metrics Changes - Net sales for Q4 2025 increased by 4.4% to $291.3 million compared to $279.2 million in Q4 2024, with comparable sales up 2.2% [12][17] - Full-year net sales for fiscal 2025 were $929.1 million, a 4.5% increase from $889.2 million in 2024, with comparable sales up 4.3% [17][19] - Gross margin for Q4 2025 was 38.2%, up from 36.2% in Q4 2024, driven by product margin improvement [15][19] - Operating income for Q4 was $25 million, or 8.6% of net sales, compared to $20.1 million, or 7.2% of net sales in the prior year [16][20] - Net income for Q4 was $19.6 million, or $1.16 per share, compared to $14.8 million, or $0.78 per share in the previous year [17][21] Business Line Data and Key Metrics Changes - Men's category led positive comparable sales growth during the holiday period, followed by women's, accessories, and hardgoods [4][14] - Footwear was the only negative comping category [14][55] - Private label penetration reached approximately 30% of sales in 2025, up from 12% five years ago [7] Market Data and Key Metrics Changes - North America net sales for Q4 were $224.4 million, an increase of 4.8% from 2024, with comparable sales up 5.5% [12][13] - Other international net sales, which include Europe and Australia, were $66.9 million, up 3% from last year, but comparable sales declined 7.5% in Q4 [13][19] - For fiscal 2025, North America net sales were $757 million, a 5.1% increase from 2024, while other international net sales were $172 million, up 1.7% [18][19] Company Strategy and Development Direction - The company is focused on three strategic priorities: driving revenue growth through consumer-focused initiatives, optimizing profitability, and managing volatility while funding strategic expansion [6][9] - The commitment to refreshing the product mix with innovative offerings has been a cornerstone of success, with over 150 new brands launched in 2025 [7][8] - The company plans to open five new stores in 2026 while closing approximately 25 stores, including 20 in North America and five internationally [33][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to generate value despite economic volatility and evolving global dynamics [10] - The company anticipates total sales growth of 3%-5% for Q1 2026, with comparable sales expected to be between 2% and 4% [27][30] - Management highlighted the importance of maintaining operational discipline and delivering distinctive merchandise to drive growth [10][32] Other Important Information - The company ended the year with cash and current marketable securities of $160.6 million, up from $147.6 million the previous year [21][22] - The company repurchased 2.7 million shares during fiscal 2025 at an average cost of $14.18 per share, totaling $38.3 million [23] Q&A Session Summary Question: What is the situation in Europe regarding comparable sales? - Management indicated that Europe was the primary driver of the international comp performance, with a strategic shift towards full price selling showing positive results [36][37] Question: Why is the comp guidance for the quarter lower than current performance? - Management noted that while February was strong, there was observed softness in early March due to global conflicts and rising fuel prices [44][45] Question: How did private label perform compared to branded products during the holiday season? - Management stated that there were no significant changes in trends between private label and branded products, with both performing well [49][50] Question: What are the plans for store openings and closures? - Management confirmed plans to open five new stores while closing approximately 25, focusing on profitability and cash flow [67][70]

Financial Data and Key Metrics Changes - Net sales for Q4 2025 increased by 4.4% to $291.3 million compared to $279.2 million in Q4 2024, with comparable sales up 2.2% [12][17] - Full-year net sales for fiscal 2025 were $929.1 million, a 4.5% increase from $889.2 million in 2024, with comparable sales up 4.3% [17][19] - Gross margin for Q4 2025 was 38.2%, up from 36.2% in Q4 2024, driven by product margin improvement [15][19] - Operating income for Q4 was $25 million, or 8.6% of net sales, compared to $20.1 million, or 7.2% of net sales in the prior year [16][20] - Net income for Q4 was $19.6 million, or $1.16 per share, compared to $14.8 million, or $0.78 per share in the previous year [17][21] Business Line Data and Key Metrics Changes - Men's category led positive comparable sales growth during the holiday period, followed by women's, accessories, and hardgoods [4] - For the full year, women's was the largest positive comping category, followed by men's, hardgoods, and accessories, with footwear being the only negative comping category [18] Market Data and Key Metrics Changes - North America net sales for Q4 were $224.4 million, an increase of 4.8% from 2024, with comparable sales up 5.5% [12][13] - Other international net sales, which include Europe and Australia, were $66.9 million, up 3% from last year, but comparable sales declined 7.5% in Q4 [13][14] Company Strategy and Development Direction - The company is focused on three strategic priorities: driving revenue growth through consumer-focused initiatives, sustaining profitability optimization, and capitalizing on a solid financial foundation for strategic expansion [6][9] - The company launched over 150 new and emerging brands in 2025, with private label penetration reaching 30% of sales, up from 12% five years ago [7][8] - The company plans to open 5 new stores in 2026 while closing approximately 25 stores, including 20 in North America and 5 internationally [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to generate value despite economic volatility, emphasizing the effectiveness of strategic initiatives [10] - The company anticipates total sales growth in the low single digits for the year, despite the negative impact of closed stores worth approximately $12 million [30][32] - Management noted that ongoing volatility in the macro environment warrants caution, but they remain optimistic about maintaining positive momentum [29][30] Other Important Information - The company ended the year with cash and current marketable securities of $160.6 million, up from $147.6 million the previous year, with no debt on the balance sheet [21][22] - The company repurchased 2.7 million shares during fiscal 2025 at an average cost of $14.18 per share, totaling $38.3 million [23] Q&A Session Summary Question: What is the situation in Europe regarding comparable sales? - Management indicated that Europe is driving the performance, with a strategic shift towards full price selling leading to improved results [36][37] Question: Why is the company anticipating lower comparable sales performance for the remainder of the quarter? - Management noted softness in sales due to global conflicts and rising fuel prices, leading to a cautious outlook [44][45] Question: How is the private label performing compared to branded products? - Management stated that there were no significant changes in trends between private label and branded products, with both performing well [49][50] Question: What are the expectations for spring assortments and promotions around Easter? - Management is planning to take advantage of Easter with new assortments while maintaining a focus on full price selling [52][53] Question: What steps are being taken to stabilize international operations? - Management emphasized a focus on product assortment and customer connection to drive stability and growth in international markets [60][61]

Financial Data and Key Metrics Changes - For the full year of 2025, the company generated $311.1 million in revenue and $41.4 million of Adjusted EBITDA, representing a 1% year-over-year growth [16][17] - In Q4 2025, total revenue was $74.7 million, down from $79.6 million in the prior year period [16][17] - Adjusted gross margin for Q4 was 53.5%, compared to 46.6% in the prior year [18] - Adjusted operating expenses for Q4 were $26.2 million, representing 35% of revenue, down from 37% in Q4 2024 [18][19] - The company incurred impairment charges on goodwill and intangible assets of $110.2 million during 2025, leading to a GAAP net loss of $178 million, up from a loss of $69.5 million in 2024 [19][20] Business Line Data and Key Metrics Changes - Technology revenue for Q4 was $51.9 million, while professional services revenue was $22.8 million, with the decline in professional services attributed to reduced FTE service offerings [17] - For the full year, technology revenue increased by 7% year-over-year to $208.3 million, while professional services revenue declined by 8% [17] Market Data and Key Metrics Changes - The company finished the year with 32 net new logos, ahead of the target of 30 but below the initial expectation of 40 [16] - The dollar-based retention rate for technology plus TAMS closed the year at 93% [16] Company Strategy and Development Direction - The company is focused on long-term success and is conducting a strategic review to position itself better for shareholder value [6][29] - There is a renewed emphasis on simplifying the commercial engine to drive technology ARR bookings and improve retention through predictable migrations [12][13] - The company aims to leverage its intellectual property and expertise in AI to differentiate itself in the market [12] Management's Comments on Operating Environment and Future Outlook - Management noted that the healthcare market is under pressure, with clients needing to manage costs while maintaining clinical quality [40] - The company is not providing full-year guidance for 2026 but expects Q1 revenue to be between $68 million and $70 million, with Adjusted EBITDA of $7 million to $8 million [21][22] - There are anticipated challenges related to the DOS to Ignite migration, with expected revenue declines due to downselling and churn [22][23] Other Important Information - The company is undergoing leadership changes, with a new CEO emphasizing a back-to-basics approach and a focus on core capabilities [6][9] - The company is reviewing its cost structure to ensure strategic capital allocation and is focused on expanding technology bookings and margins [9][12] Q&A Session Summary Question: Does the strategic review include the possibility of selling the company? - Management is focused on positioning the company for long-term success and creating shareholder value, but is currently in an assessment mode [29][31] Question: Can you elaborate on the transition impact regarding the $52 million in data platform revenue? - The $52 million encompasses both integrated applications and data platform infrastructure, with the latter facing the highest pressure during the migration [35][66] Question: What insights were gained regarding bookings and demand in Q4? - The market is in need of better cost management and clinical quality, which is reflected in the sales funnel and demand for the company's solutions [40] Question: How does the company plan to maintain client relationships amid potential downsells? - The company generally retains application relationships even when facing downsells in data platform infrastructure, focusing on client needs and expertise [49][66] Question: What is the expected impact of the DOS-related ARR churn on 2026? - Approximately 75% of the $12.5 million in ARR churn is expected to impact 2026, with negotiations ongoing to retain application relationships [65][66]

Financial Data and Key Metrics Changes - Total revenue for the full year 2025 was $185.3 million, down 2% year-over-year from $189.9 million in 2024 [10] - Advertising revenue declined 3% to $91.7 million, while programmatic advertising grew 7% to $69.6 million, representing 76% of total advertising revenue [10] - Adjusted EBITDA improved 61% to $8.8 million compared to $5.5 million in 2024 [11] - Net loss from continuing operations was $57.3 million compared to $34 million in 2024, reflecting a non-cash goodwill impairment charge of $30.2 million [11] Business Line Data and Key Metrics Changes - Studio revenue nearly tripled to $16.1 million, driven by the delivery of three feature films and contributions from the micro drama category [10] - Content revenue increased 9% to $37 million, while direct sold content declined 26% to $21 million [11] - Commerce and other revenue declined 8% to $56.5 million, with affiliate commerce declining 7% to $55.5 million [11] Market Data and Key Metrics Changes - Time spent totaled 276.5 million hours, down 7% year-over-year, expected due to elevated engagement during the presidential election cycle in 2024 [12] - Q4 revenue was $56.5 million, up 1% year-over-year, with advertising revenue increasing slightly to $25.6 million [14] - Programmatic advertising grew 2% to $18.4 million, while direct sold advertising declined 3% to $7.2 million [14] Company Strategy and Development Direction - The company believes it is undervalued, with the current market value not reflecting the strength of its individual brands and innovative work [4] - The focus is on closing the gap between market valuation and the intrinsic value of assets, particularly through new products and AI-driven experiences [9] - The company is exploring strategic options to unlock value and address liquidity challenges, with an update on strategic direction expected in the coming quarters [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by legacy costs and a pessimistic view of digital media, but believes in the potential of unlaunched products and forthcoming features [5] - The company is committed to demonstrating the value of its assets and innovative work, particularly in AI and new product experiences [8] - Guidance for 2026 is being withheld due to ongoing evaluations of strategic opportunities [15] Other Important Information - The company ended the year with cash and cash equivalents of approximately $27.7 million, a decrease of $10.9 million compared to 2024 [12] - Total debt as of December 31, 2025, was $60.2 million, with $45 million in term loans and $15.2 million in film financing arrangements [13] Q&A Session Summary - No specific questions or answers were provided in the content, thus this section is not applicable.

Financial Data and Key Metrics Changes - Revenue for 2025 increased by 20% to approximately $2.2 million, compared to $1.86 million in 2024. Excluding a temporary revenue impact from the transition to managing Amazon sales, full-year revenue growth would have been closer to 30% [6][10] - Gross margin improved to 62.5% in 2025 from 54.1% in 2024, reflecting an improved product mix and a growing contribution from e-commerce channels [10] - The company reported a net loss of $6.4 million in 2025, compared to a net loss of $6.2 million in 2024. Adjusted net loss for the year would have been approximately $5.6 million when excluding one-time legal expenses [10][11] Business Line Data and Key Metrics Changes - E-commerce revenue increased by 88% in 2025, driven by strong growth on Amazon and the direct-to-consumer website, now representing more than half of total revenue [8] - Municipal markets are seeing increased interest in fertility control approaches, with ongoing programs in cities like New York and Chicago [8][9] Market Data and Key Metrics Changes - Internationally, the company expanded its footprint with regulatory approvals in New Zealand and new distribution relationships in Belize [9] - The company is in discussions with potential deployment partners in New York City as the trial of Evolve concludes [9] Company Strategy and Development Direction - The company's core strategy remains focused on scaling current initiatives and maintaining resource allocation discipline while searching for a new CEO [5] - The company aims to accelerate growth in e-commerce, municipal adoption, and technology validation while managing operating expenses carefully [11] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for growth in 2026, aiming for higher revenue growth rates than in 2025 [13] - The company is focused on maintaining financial discipline while investing in areas with traction, such as e-commerce and municipal markets [11] Other Important Information - The legal dispute with Liphatech has been resolved satisfactorily, with all litigation dismissed [10][22] - The company ended 2025 with $8.6 million in cash and short-term investments, providing a solid operating runway [11] Q&A Session Summary Question: Should we expect similar growth rates in 2026 as in 2025? - Management indicated that growth could be higher, aiming to accelerate growth in profitable areas [13] Question: What will contribute to 2026 revenues? - Revenue will come from a mix of e-commerce, municipal orders, and international expansion [14][15] Question: What is the status of the court case with Liphatech? - The case has been settled satisfactorily, and the company does not expect recurring legal costs related to this issue [22][23] Question: What is the status of product registration in Australia? - Regulatory authorities are expected to provide a response in the spring regarding product registration [25] Question: Will the new CEO have incentives based on stock performance? - Yes, a meaningful portion of the CEO's compensation is expected to be equity-based and aligned with long-term shareholder value [56] Question: How is the agricultural sector performing? - The agricultural sector is performing well, with expansions in various areas including almond groves and poultry [33] Question: Will the company expand its sales team? - Yes, the company plans to expand its sales team to maximize B2B sales efforts [60]

Financial Data and Key Metrics Changes - The company reported record collections of $245 million, an increase of 41% year-over-year [3][4] - Revenue for the quarter reached $155 million, up 30% compared to the prior year [4][17] - Adjusted EPS for the quarter was $0.69, reflecting strong financial performance [4] - The cash efficiency ratio was 71%, driven by strong collections from the Conn's portfolio purchase [4][16] - For the full year, the cash efficiency ratio was 74%, with a target leverage ratio of 2x-2.5x on a sustained basis [19][20] Business Line Data and Key Metrics Changes - Collections from the Conn's portfolio contributed $36 million for the quarter, while the Bluestem portfolio added $14 million [10] - The company achieved record deployments of $381 million, up 6% from the previous year [3][12] - Estimated remaining collections reached $3.4 billion, a 23% increase year-over-year [4][13] Market Data and Key Metrics Changes - Delinquency trends remain elevated across non-mortgage consumer asset classes, creating favorable portfolio supply trends [5][7] - Personal savings levels have decreased to $831 billion, significantly lower than pre-pandemic averages, indicating limited consumer ability to absorb financial hardships [6] - The insolvency market has seen an increase in the number of insolvencies in the U.S. and Canada, fueling a resurgence in supply of insolvency portfolios [6][7] Company Strategy and Development Direction - The company aims to solidify its leadership position as a strategic acquirer of dislocated consumer credit portfolios, with the Bluestem acquisition expected to contribute meaningfully to financial results in 2026 [4][19] - The focus remains on deploying capital to purchase portfolios at attractive risk-adjusted returns, with a disciplined approach to M&A [22] - The company has improved its operational efficiency and collection capabilities, which are expected to enhance net returns [9][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the investment opportunity, citing favorable supply conditions and strong collection performance [5][7] - The current economic environment is viewed as a net positive for supply, with no indications of impacting expected liquidation rates [27][28] - The company anticipates continued growth in legal collections due to increased inventory of suit-eligible accounts [12][18] Other Important Information - The company completed a follow-on offering post-IPO, improving liquidity and reducing ownership concentration [3] - A quarterly dividend of $0.24 per share was declared, representing a 4.7% annualized yield [22] - The company repurchased 3 million shares for $59 million as part of a tactical strategy to support the follow-on offering [22] Q&A Session Summary Question: Thoughts on macro uncertainties affecting purchasing environment - Management indicated that incremental pressures from energy costs and modest employment deterioration are likely to impact delinquencies but not liquidation rates [27][28] Question: Trends among sellers regarding forward flow deals - Management noted that about half of deployments have historically been in forward flows, but they do not target a specific percentage [30][31] Question: Expectations for cash efficiency ratio as portfolios run off - Management expects a substitution effect with the Bluestem portfolio, maintaining a cash efficiency ratio in the high sixties excluding certain collections [36] Question: Increase in supply of charged-off accounts - Management stated that the supply of elevated levels of charged-off accounts has been ongoing and is expected to continue [47] Question: Tax rate expectations for 2026 - The expected tax rate for 2026 is projected to be around 24.5% [49] Question: Current posture on share buybacks - Management indicated that the recent share repurchase was tactical, with a focus on deploying capital for portfolio purchases [51][52] Question: Characteristics of deployments and market shifts - Management highlighted an increase in deployments in insolvencies and a consistent pattern in other asset classes [56][57] Question: Legal channel returns and scaling opportunities - Management confirmed that the volume of legal accounts aligns with underwritten expectations, with no significant uncovered inventory impacting profitability [93]