NextBoat Inc. Common Stcok

Good afternoon, everyone, and welcome to NextBoat's second quarter 2026 earnings conference call. With us today are Brian John, NextBoat's chief executive officer, Blake Phillips, the company's chief operating officer, and Chad Corbin, the company's chief financial officer. Jason Ruegg, founder and president, will join us for Q&A. Blake will begin the call with an overview of the business, followed by Brian who will discuss our performance and strategic initiatives. Chad will then review the financial results, after which we will open the line for questions. If you have dialed in and would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. Thank you for joining us. Thank you for watching. Also on today's call, management will make comments referring to non-gap financial measures. Management believes that the inclusion of these financial measures helps investors gain a meaningful understanding of the changes in the company's core operating results. These measures can also help investors who wish to make comparisons between NextBoat and other companies on both a gap and a non-gap basis. The reconciliation to non-gap financial measures to the most directly comparable gap measures is available in today's earnings release. The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. Please also note that all comparisons of our second quarter 2026 results are made against the second quarter 2025 results, unless otherwise noted. I'd also like to remind everyone that today's call is being recorded and an archived version of the call will be available on the company's website sometime after the call. With that, I'd like to turn the call over to COO Blake Phillips. Blake.

Thank you, operator, and good afternoon, everyone. We appreciate you joining us today. I want to start out with our team. Our brokers on the docks and out on the water, our buyers behind their desks working on our next acquisitions, and our closings, service, and support teams making it all happen. Because what they delivered this quarter is the story of this call. Transaction volume up approximately 138% year over year. Our transaction closing team tripled to keep pace while we continue to model our AI to work alongside them. The organization grew about 42% year over year to build the machine that makes all of this possible. That's not incremental progress. That's a company hitting its stride. I'm proud of what this team has built and grateful to everyone who helped to get us here. I'll walk you through four pillars, where we've been and where we're going. 1. In the past year, we've built the infrastructure to become the leading platform to buy, sell, service, and maintain pre-owned boats in the U.S., and we took that company public. 2. We are now scaling that company and that platform, and this quarter is proof that it scales. 3. Our NextBoat AI platform is the multiplier. The engine that takes us from over 100 million in revenue in 2025 toward what we believe can be a billion dollar revenue company. Four, we are focused on turning that scale into profitability, making every part of our business accretive on its own and driving down corporate level costs, including the cost of being a public company so that profitability shows up at the bottom line. Here's the backdrop for all of it. NextBoat has been profitable every single year since our founding, more than 13 years running. We didn't take this company public because we needed to prove we could make money. We took it public because we saw a fragmented, multi-billion dollar market ready to be rebuilt around a better platform, and we needed the capital infrastructure to go build it. That's exactly what the last year has been. And the opportunity is enormous. roughly three out of every four boat transactions in the U.S. involve a pre-owned vessel. That's the majority of this entire market, and it still runs largely on fragmented listings, opaque pricing, and paperwork that hasn't changed in a decade. We are building the platform that fixes that. The speed, the transparency, and the liquidity this market has never had. But there's something underneath the platform that we think is even more powerful. We sit at the intersection of two massive datasets. On one side, we know exactly what buyers and brokers are looking for, the demand. On the other, we have a constant inflow of boats coming to us for valuation, the supply. That puts us in a unique position to connect those dots off market, matching real buyer and broker demand against real available inventory before either side has to search for another. We're bringing that capability to market as its own offering, Match, powered by NextBoat. It's the connective tissue of this entire platform, and we believe it's one of the most valuable and most exciting pieces of what we've built. We're not just another dealership competing for the same customers. We are the market maker for pre-owned boats, the company on both sides of the trade with the technology, the capital, and the infrastructure to let thousands of people buy and sell from anywhere. This is a scalable, decentralized marketplace built for how boats will actually be bought and sold going forward, not a bigger version of the old model. In this quarter, the model proved itself. Record transaction closings, record quarterly sales, transaction volume up roughly 120% year over year, and it worked across both sides of our business, brokerage and company-owned inventory alike, extending the growth trajectory we set last quarter. We also landed two partnerships that validate the platform at a category level. Marine Max, one of the largest names in the marine industry, is now our preferred wholesale partner for pre-owned boats and yachts. New Coast is now our preferred finance and insurance partner. These are the kind of relationships that come looking for you once the platform starts working at a scale. We also kept building our physical footprint this quarter. The places where our brokers, service teams, and customers actually meet the water. In South Florida, we grew through the acquisition of Apex Marine Group, giving us a flagship operating location in the most active boating market in the world. In the mid-Atlantic, we acquired a property in Maryland capable of supporting nearly 200 boats from reconditioning to sales, and in North Carolina, we expanded our operations to complement multiple parts of the business, from company-owned inventory to brokerage to service and support. Taken together, this is a footprint that's growing deliberately, anchored by real operating hubs across three of the most important boating regions in the country. So today, for the first time, every piece is on the field at once. The platform, the brand, the partnerships, and the footprint. Which brings us to what's next. We told you on our first call that this would be a building year. It was, and now the building is done. The pieces are in place so our focus shifts. From proving the model to sharpening it. From adding scale to converting that scale into margin. Thank you for joining us.

Thank you, Blake, and good afternoon, everyone. We appreciate you joining us today. As Blake mentioned, in the second quarter of 2036, we continue to execute on the plan we laid out, delivering record revenue of $59 million for the quarter, representing year over year growth of 88.41%. We also achieved record unit volume, selling 255 boats during this quarter, an increase of more than 138% year over year. Our brokers business also continued to grow rapidly. During the second quarter, we added 26 new brokers to the team, further expanding our ability to generate transactions across the platform. We continue to focus on broker recruitment and are also very much looking forward to the upcoming boat show season. Our order group has also had a very strong start to the year. In just eight months, the business has already surpassed the full year goal of $100 million in brokers transaction volumes. reaching $134 million already this year. We believe this demonstrates the significant opportunity we have to continue expanding our brokerage network and transaction volume. We are also excited to open an additional autograph sales location in Miami's famous Bayshore Landing Marina. As we discussed previously, our first quarter results were impacted by boat show expenses, costs associated with becoming a public company, and one-time expenses related to employee share issuances. After 13 years of profitability as a private company, we view our return to profitability in the second quarter on an adjusted EBITDA basis an important milestone as we continue to build NextBoat. We went public at the end of last year and made the conscious decision to invest upfront in the infrastructure, systems, people, compliance and technology required to operate as a scalable public company. Those investments increased our overhead in the short term, but they were intentional and necessary. Today, our focus is increasingly on leveraging that infrastructure to grow efficiently, improve margins and generate more revenue for each transaction. Our major part of that strategy is expanding into high margin level businesses, including finance, insurance and warranty. These are newly developed areas of our business that provide opportunities to generate additional revenue beyond the initial boat transaction. Much like in the auto industry, these F&I initiatives carry very much higher margins and will be the focus on how we increase our overall margins within the company. One of the most important developments during the quarter was our five-year strategic partnership with MarineMax, the largest recreational boat and yacht retailer in the United States. This agreement was signed June 25, 2026. At its core, this relationship connects Marine Max's significant retail trade-in pipeline with NextBoat's AI-powered valuation wholesale and transaction platform. This partnership is strategically important. It creates an opportunity for NextBoat to participate in additional revenue streams associated with transactions generated through the Marine Max relationship. In particular, NextBoat can participate in financing and insurance revenue through revenue sharing agreements with Marine Max's affiliated finance and insurance businesses. This creates an opportunity for us to generate revenue beyond the boat transaction itself and increase the amount of revenue we can generate from each transaction. For transactions involving off-the-hook owned inventory, our resort finance operators will focus on financing opportunities. Other qualifying transactions will be referred to New Coast, Marine Max's finance and insurance operation under the terms of our agreement. We also intend to launch a new warranty business this month. Warranty carries the biggest margins in our industry, and we will make warranty products available across eligible Nexpo transactions, creating another opportunity to not only increase revenue per transaction, but continue to focus on improving our margins. The addition of Apex and Bellhart will also allow us opportunities to sell warranted service customers. We are putting significant focus on these initiatives because we believe they can play an important role in increasing both revenue and margins over time. These acquisitions are strategically important because they add physical marine infrastructure to our technology platform. They provide established facilities, inventory storage and service capabilities, existing customers, skilled technicians, and additional opportunities to generate higher margin service parts and repair revenue. This is an important part of our strategy because technology can transform how boats are bought and sold, but there are certain parts of the marine industry that require physical infrastructure. Storage, service, shipping, and repair cannot be replaced by software. Our service locations give us the ability to store and service inventory in-house, which can reduce our reliance on rented facilities and outsource services. It also gives us a hub from which we can position inventory and move boats efficiently through our network. More importantly, the service business gives us an opportunity to participate in the ownership cycle beyond the initial sale. Instead of generating revenue only from when a boat gets bought or sold, we can also participate in service, maintenance, parts, and repair opportunities over time. By integrating Apex and Bellhart into the broader NextBoat ecosystem, we believe we can create meaningful cross-selling opportunities and build a more diversified revenue base. Let me emphasize the importance of the NextBoat platform. While brokers remains an important part of the business, we believe what differentiates NextBoat is the technology platform that empowers transactions across the network. The NextBoat platform is designed to enable buying and selling of boats at scale. It is already being used for boat valuations, deal structuring, offer generation, CRM workflows, and boat broker support Marine Max's decision to partner with us is an important indication of the value of this technology, and we are now working to employ the platform within the relationship as well. The platform continues to develop and improve as we add data, transactions, and automation. Our goal is to increase the number of offers and transactions we can process without requiring senior management to be involved in every individual deal. AI and automation are increasingly being integrated into closings, finance, warranty, sales, logistics, deal flow management, and customer follow-up. Over time, we expect these capabilities to increase productivity, reduce administrative work, and provide greater operating leverage as we grow. Another important driver of our growth is our broker recruitment. We added 26 new brokers this quarter, and broker expansion remains a key component of the off-the-hook growth strategy. One of the attractive aspects of our model is that brokers are primarily performance-based revenue generators. As productive brokers are added to the network, we can increase transaction volume without adding the same level of fixed corporate overhead associated with traditional dealership model. Our NextBoard AI system tracks the broker's structure and associated incentives automatically, allowing us to manage the program efficiently as the network grows. Ultimately, we believe the combination of technology, broker growth, physical infrastructure, and additional revenue streams give the next boat the opportunity to build a much more diversified marine platform. We are not simply focused on selling more boats. We are focused on increasing the number of transactions we can process, increasing the revenue we generate from each transaction, and increasing the portion of the revenue that comes from higher margin businesses. That is the opportunity we see ahead. With that, I'll turn the call over to our Chief Financial Officer, Chad Corbin, who will walk you through our financial results in more detail. Chad?