Off The Hook YS Inc.

Welcome, everyone. Thank you for standing by for Off the Hook's first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentations, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. I would now like to hand the conference over to your speaker today, John Evans, Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone, and welcome to Off the Hook's first quarter 2026 earnings conference call. With us today are Brian John, Off the Hook's chief executive officer, Jason Rube, the company's founder and president, and Chad Corbin, the company's chief financial officer. Blake Phillips, the company's COO, will join us for Q&A. Jason 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'll open the line for questions. I'd like to start reminding you that certain comments on this call are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Any forward-looking statements speak only as of today. These statements involve risk and uncertainties that could cause results differ materially from expectations these risks include but are not limited to the impact of seasonality and weather global economic conditions and the level of consumer spending the company's ability to capitalize on opportunities or grow its market share and numerous other factors identified in our forum 10k and other filing through the securities and exchange commission which can be found in the investor relations section of the company's website 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 off-the-hook and other companies on both a GAAP and non-GAAP basis. The reconciliation and non-GAAP financial measures to the most directly comparable GAAP 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 that forward-looking statements are made, except as required by law. Please also note that all comparisons of our first quarter 2026 results are made against the first quarter of 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. Now I'd like to turn the call over to Jason. Jason? Thank you, John. Good afternoon, everyone.

We appreciate you joining us today. First, I want to thank our team across the country for the work that went into delivering a strong first quarter of 2026. The progress we've made reflects a lot of hard work, long hours, and relentless focus on execution. I'm incredibly proud of what this team has built and grateful to everyone who helped us bring it to this point. There are four pillars to where we were and where we are going. One, over the past year, we built the infrastructure needed to build the best platform to buy, sell, service, and maintain pre-owned boats in the US and took that company public. Two, we're now scaling the company and platform aggressively. Three, our NextBoat AI platform is the multiplier that will help us grow and scale from over 100 million revenue in 2025 into what we think will be a multi-billion dollar revenue company. we're gonna grow as profitable public company that keeps all the stakeholders, investors, employees, vendors, and customers in mind. Since I founded this company, we've been profitable every year for 13 years. Over the past year, along with going public, we have made major investments in the infrastructure to grow the company and scale to a multi-billion dollar plus revenue company. I believe that the opportunity in pre-owned boats remains robust with roughly three quarters of all boat transactions in the US involving pre-owned vessels and yet the process for buying and selling them still remains highly fragmented and inefficient. Our platform brings speed, transparency, and liquidity to the market. Because of our position as the market maker and velocity trader of pre-owned boats, we are in a unique position to build the future of used boat sales, a platform that enables thousands of people to buy and sell boats from anywhere, backed by our technology, capital, and infrastructure. This is not a traditional boat dealership. It is a scalable, decentralized marketplace built for how boats will be bought and sold going forward. With that, I'll turn the call over to our CEO, Brian John, who will walk through our performance in the first quarter of 2026 and discuss the strategic initiatives for driving our growth through 2026. Brian? Thank you, Jason, and good afternoon, everyone. We appreciate you joining us today. As Jason mentioned, the first quarter of 2020 delivering record revenue of $29.8 million, representing year-over-year growth of over 9%. We also achieved record unit volume, selling 127 boats during the year, an increase of more than 46%, versus 87 boats in Q1 of 2025. This revenue does not count the value of the boats sold in the fastest-growing brokerage business, where we added 30 new brokers in the first quarter. Looking closer, Note the brokerage revenue is recognized only by the commissions earned. We believe that it is important to monitor the transaction value of boats sold across both brokerage and wholesale. On an apples-to-apples comparison, brokerage transactions amounted to $33.99 million in dollar value of boats, followed by wholesale at $26.2 million. The total transaction value of the 127 boats sold was $61.5 million, with an average selling price of $500,000.00. an average gross profit of almost 11%. Looking at where our brokers are located and where we sold the most boats, the transaction value of combined brokerage and wholesale boats in South Florida was $41.2 million. Other notable regions include North Carolina at $10.195 million and West Coast of Florida for $5.851 million. Motor yachts and center consoles are the primary driver of the dollar value of boats contributing 19.5 million and 16.186 million. Together, these two categories represent over 58% of the dollar value of boats sold. Sales performance showed a consistent upward trend throughout the quarter. Monthly dollar value of boats sold grew from 11.2 million in January to 19.2 million in February, peaking at 31.1 million in March. making each month higher value value than the last this continued in the first month of the second quarter where the value value of votes sold continues to grow and the oth revenue for that month was 21 million and so far our revenue has exceeded the second quarter of 2025 only in the first half of the second quarter finished importantly this growth is not driven by a single initiative it reflects progress across multiple parts of our and continue momentum in our brokerage operations. We believe these results demonstrate the scalability of our model. As we expand inventory access and increase the productivity of our broker network, we're able to drive higher transaction values while maintaining discipline and control. Jason laid out the four pillars of focus on the future that I would like to talk more about now. We went public at the end of last year and made the conscious decision and technology to become a scalable public company. That effort has significantly increased overhead in the short term, but those investments were intentional. We built the Autograph Yacht Group into a premier flora brokerage that has contributed immediately to our company. We've purchased and partnered on marinas and service centers to increase our geographic footprint. We've invested in our NextBoat AI platform to make it easy for our brokers to price, sell, and service boats. We believe we are now moving from the building phase into the execution and scaling phase. The focus is simple, scale revenue and profitability to leverage the infrastructure we already built over the next 12 to 18 months. At OTH, we believe inventory acquisition is the lifeblood of our business. Our WeBuyVotes.com is becoming a scalable acquisition engine. Our Business Development Center, or BDC, is becoming the WeBuyVotes.com acquisition team, which we believe can be in the industry. We're now approaching 500 plus inbound leads per week with an extremely low fixed spend budget. This gives us scalable, low-cost consumer acquisition model while competitors continue to rely heavily on expensive traditional advertising. We can't emphasize enough our NextBoat platform that we call NextBoat AI. NextBoat AI is not a brokerage. It's a technology-enabled platform for buying and selling boats at scale. It's already assisting us in both valuations, deal structuring, offer generation, CRM workflows, and broker support. Our goal is to get to the point where we can make thousands of offers per week without requiring Jason or senior leadership to touch every deal. AI is now being integrated into closings, financing, warranty sales, logistics, deal flow management, follow-up automation, and eventually much of the paperwork process. The vision is to remove friction and to automate as much of the transaction process as possible. It's important to note that in the first quarter, half the boats sold were from our growing brokerage unit. We believe the addition of more brokers combined with the addition of our next boat AI solution will lead to exponential growth as our brokers are freed up more with the tools to sell boats faster and more efficiently. We're happy to have added almost as many brokers in the first quarter than we have in the entire company at the time we went public because broker recruitment is a major driver for the OTH growth. Scaling brokers is one of the most attractive parts of our model, and that brokers cost the company very little fixed overhead. Unlike traditional dealerships, OTH brokers are essentially performance-based revenue generators. Every productive broker adds revenue with minimal incremental corporate costs. So far, we have grown to nearly 100 brokers organically, largely through the small group of managers and recruiting staff. Their growth has given us the confidence that this model works. In order to scale brokers faster, we've created a five-tier override incentive program to encourage our brokers to recruit brokers, and they believe they can add value to the OTH team. In this five-tier override platform, brokers recruit brokers, and those brokers recruit brokers, and so on and so on, five levels deep. Brokers then earn an override on the votes sold by the recruiting broker based on net profit after all expenses and commissions, keeping incentives aligned with profitability. Our Nexport AI system tracks the entire structure automatically, from recruiting, team production, overrides, profitability, and dashboard visibility. These new brokers will have a clean dashboard showing their team's performance, override eligibility, and locked-slash-unlocked qualified levels. Now a single broker can realistically build a team of hundreds of people while the platform handles the complexity. As I said earlier, scaling without scaling costs is the key to our brokerage growth. globally without scaling costs at the same rate. Traditional brokers and dealerships cannot scale as efficiently because for them, overhead grows alongside headcount. Our belief is that with AI and automation, we can scale to thousands of brokers globally without excessively growing our administrative staff. Human management will always be necessary, but our proprietary software operating system is most of the heavy lifting. Even though over 90% of our boats we sell are used boats, we also sell new boats. PRR's strategic focus is quality over quantity. We are very proud of the brand relationships with top brands such as Sportsman and Pursuit Boats that we have chosen because of the quality and popularity of the boats that they produce. Although OTH will remain primarily a pre-owned boat platform, we do think that selecting new boats in certain markets enhances the company's overall product offering. But we own the brands we sell in all markets, produce strong resale cycles, create customer confidence, and improve terms and margins. We firmly believe that we would rather represent fewer great brands than many average ones. Just this morning, we announced that we completed the purchase of the 8-Effect Marine in South Florida. This acquisition is a key component to our long-term storage service strategy. This is a really strong differential for the OTH story. Although we strongly believe AI will transform much of the industry, there are certain things technology can't replace. Storage, matters. APEX becomes a strategic infrastructure that lowers cost, improves margins, reduces turn times on fixed boats for resale, and creates operational leverage versus our competitors. APEX allows us to save substantial amounts of costs where we're renting and outsourcing the servicing of boats. APEX is a hub from which we can store and position boats to be sent to our broker locations as well. So although we believe that software is the future, infrastructure still matters, and we are investing in both. Last but not least, I want to touch on the floor plan and our capital position. Creating the velocity of our wholesale operations where we are the price maker and the go-to purchaser of used boats for companies as large as Marine Max down to smaller boats and brokerages across the United States. So far in 2026, we've utilized only $40 million of our expanded inventory floor plan financing more than doubling our capacity for the 25 million level prior to our IPO. Our flippant of $65 million with our five-time turns represents over $300 million of revenue for OTH when it's fully realized that if we continue our trajectory of matching brokerage boat value with OTH-owned revenue value, we have grown our top and bottom line substantially with our implied boat value sold to greater than 600 million boats per year. We're in an effort to increase our access to capital and scale our inventory faster. We know that capital availability gives us the ability to move faster than competitors, and we continue to grow that substantially over the next 12 months. With that, I'll turn the call to our Chief Financial Officer, Chad Corbin, who will walk you through our financial results in more detail.