A2Z Cust2Mate Solutions Corp.

Good day, everyone, and welcome to A to Z First Quarter 2026 Financial Results and Business Update Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this call is being recorded. It is now my pleasure to turn the floor over to your host, Brett Moss, with Hayden Iyer. The floor is yours.

Thank you, operator. Good day, everyone. Before we begin, please note that today's call will contain forward-looking statements within the meaning of a private securities litigation reform act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Please refer to our earnings release as well as our findings of the SEC, including our 2025 form 10-K for discussion of these risks. A replay of this call will be available shortly after its conclusion. With that, I'd like to turn the call over to our CEO, Mr. Gaudi Gross, Chief Executive Officer of A2Z.

Thank you, Brett, and good morning, everyone. Thank you for joining our call today. Before we get started, I'd like to provide a brief overview of who we are and what we do. So, A2Z Customer Solutions Corp. is a global retail technology company focused on transforming the in-store shopping experience through our smart cart and connected retail platform. A core solution digitizes the physical store by enabling self-scanning, personalized engagement, and real-time retail intelligence at the point of purchase. Through our integrated platform, which combines smart cart infrastructure, AI-powered shopper engagement, and emerging retail media capabilities, Customate helps retailers improve operational efficiency, enhance shopper experience, and unlock new monetization opportunities within the physical retail environment. Over the last several quarters, we've been working to transition custom-made from an early-stage pilot-driven deployment model into a scalable commercial platform designed for global rollout and mass deployment across leading retail partners. This shift has required building the operational, manufacturing, and commercial infrastructure necessary to support large-scale deployments while simultaneously expanding our product capabilities beyond smart card functionality into a fully integrated connected retail ecosystem. As a result, we are now increasingly positioned as a core in-store technology layer that sits at the center of the modern retail environment and enables entirely new sources of value creation for retailers through data and media-driven monetization. Q1 2026 was a breakout quarter as we continued our transition from pilot validation to scaled commercial deployment. We are no longer in the pilot phase of smart retail. We are entering the early stages of scaled infrastructure deployments across global physical retail. What we are building is advancing rapidly into real-world infrastructure. Retailers are transitioning from pilot programs into committed multi-phase deployments, and customers are increasingly being integrated as part of the core operating layer of the physical retail landscape. Revenue growth in our first quarter was driven by delivery of our smart cart solution to retail stores. While we are early in the process of converting signed contracts to revenue at scale, the conversion curve is accelerating in a meaningful way. Importantly, we are gaining clear and measurable validation of the platform in live retail environments as deployments expand. Retailers are already capturing tangible economic impact from our solutions. Across deployments, Retailers are experiencing an uptick in sales throughput with approximately 5 additional items per transaction and approximately 15% increase in basket value. Smart cart baskets are reaching 165% of manned checkout baskets and 275% of self-checkout baskets. Daily utilization rates are above 95% with smart cart usage reaching 100% during peak hours and we have now processed over 1 million transactions. While these metrics are certainly strong signals, there is a broader transformation in store operations and shopper engagement within the physical retail environment. These outcomes are showing up across a wider set of important ROI drivers, including customer engagement, reduced checkout friction, operational efficiency, labor optimization, loyalty activation, and emerging retail media monetization. Together, these dimensions underscore that the platform is not just improving sales, It is fundamentally reshaping store performance across both the top line and operational layers. Importantly, our business model is increasingly driven by three reinforcing growth engines. First, recurring smart car platform revenues. Second, retail media monetization. And third, retail intelligence and data services. Together, these layers create a connected commerce ecosystem where each deployment expands both platform utility and long-term monetization potential. What makes the model particularly powerful is that these growth engines reinforce one another through a compounding flywheel effect. That's a shocker engagement drives increased platform usage. Increased usage generates stronger retailer outcomes and ROI. Stronger retailer outcomes support broader deployment expansion. Larger deployments create growing retail media inventory and improve platform economics, which further supports adoption and monetization. At the same time, expanded deployments and engagement generate increasingly valuable behavioral datasets, strengthening personalization, retail intelligence, and future data monetization opportunities. As this flywheel scales, the platform becomes increasingly valuable to retailers, advertisers, and ecosystem partners alike. This quarter also marked the commencement of revenues from retail media, which we believe represents one of the largest untapped opportunities in physical commerce today. We are not only digitizing the shopping cart. We are establishing a real-time engagement and media layer within physical retail, positioned directly inside the highest intent moment in commerce, the in-store shopping journey. At deployment scale, we believe this creates a highly valuable and increasingly monetizable media environment for retailers, brands, and ecosystem partners. While still in the early stages, retail media introduces a significant new monetization layer to the platform and meaningfully expands the long-term economics of our connected retail ecosystem. All of this is occurring within a market that fundamentally remains under-digitized. Physical retail is one of the largest sectors of the global economy, yet the majority of it still operates without real-time intelligence, without visibility into shopper behavior, and without integrated digital engagement layers. That structural gap between where the industry is today and what we are beginning to demonstrate in live deployments is what defines the scale of the opportunity ahead. We are already seeing increasing interest across multiple categories and geographies, including grocery, toys, home goods, and international retail markets. This breadth of interest reinforces that the opportunity is not confined to a single format or use case, but is applicable across a wide range of retail environments. As retailers gain visibility into performance and ROI, we are seeing increased willingness to expand deployments across traditional stores, formats, and regions, further validating the scalability of the platform globally. As this market evolves, we believe long-term leadership will not be determined by a single product capability. but by platform integration, deployment experience, and operational scale. And this is where our competitive position continues to strengthen. Our competitive moat is not based solely on hardware. It is built through the combination of deep retail integrations, real-world deployment experience, proprietary shopper engagement data, AI-driven personalization, retail media infrastructure, operational know-how, and a growing installed base. At deployment scale, these advantages reinforce one another. Each additional deployment strengthens integration, enriches data, improves system intelligence, and deepens our operational footprint within the retail environment. Over time, this creates a compounding advantage that becomes increasingly difficult to replicate. Within this context, AI is not a standalone initiative. It is a core enabler embedded directly into the platform. We deploy AI where it improves retailer economics and shopper outcomes in a meaningful way, integrating it into the operational fabric of the in-store experience. This includes personalization, contextual recommendations, fraud mitigation, operational optimization, and shopper intelligence. As deployment scale and data richness increases, These capabilities become increasingly powerful, improving decision-making at the point of interaction and enhancing both shopper engagement and store efficiency. AI is a compounding force that strengthens our platform over time and reinforces the structural advantages of a digitized retail environment. I want to briefly touch on our financial performance, which continues to reflect both early-stage scaling and strengthening underlying momentum. We delivered $3.3 million in revenue in the first quarter, representing 114% year-over-year growth. This increase was driven primarily by the expansion of our smart cart deployments across leading retail partners and reflects the early stages of conversion from our growing backlog into recurring commercial activity. We continue to expand our installed base during the quarter, reaching more than 2,500 smart carts delivered, including approximately 500 units delivered in Q1. Importantly, deployment activity is shifting in nature. We are transitioning from initial site-level pilots to programmatic rollouts across retail networks. We have expanded our multi-year contracted backlog to more than $195 million, representing over 19,000 smart carts scheduled for deployment globally. This is a defining milestone for the company. We have transitioned beyond pilots and isolated deployments into structured, repeatable, multi-phase rollout programs with leading retailers. What is emerging is not simply demand, but a large-scale infrastructure deployment pipeline spanning regions, formats, and retail networks. This backlog now provides a high degree of visibility into future deployments, reinforces the scalability of the platform, and reflects the strength of underlying demand. Importantly, this backlog does not include revenue from data or retail media, which we expect will add incremental revenue as those streams continue to ramp. While we remain early in the scaling curve, we are seeing increasing alignment between deployment activity, backlog conversion and revenue growth, reflecting improving visibility and a more scalable operating model. We have also strengthened our financial position. Total liquidity, working capital at quarter end was approximately $63.2 million, including cash and cash equivalents. In addition, we secured a firm proposal for a $30 million contract-backed, non-dilutive bank credit facility. This facility is directly aligned with customer contracts and deployment schedules, meaning capital availability is structurally linked to contracted commercial activity. We view this as a strong external validation of our business model, backlog quality and execution trajectory. The facility further enhances financial flexibility and supports efficient non-dilutive funding of deployments while preserving balance sheet strength for other working capital needs as we scale. Including under the credit facility, our current total available liquidity is over $90 million, approximately $2 per share. We also initiated a share repurchase program earlier this year reflecting our confidence in the long-term trajectory of the business and our commitment to disciplined capital allocation. The program authorizes us to repurchase up to $20 million of our common shares, and we have begun executing against it opportunistically in the open market. As of March 31, 26, we have repurchased 542,845 shares for a total of approximately $3.5 million, and those shares will be canceled. This program remains in place and gives us additional flexibility to return capital to shareholders while continuing to prioritize investments in growth and execution. Overall, we believe the financial results this quarter reflect a business that is still early in its scaling cycle, but increasingly supported by contracted visibility, growing deployment activity, and a strengthening commercial foundation. As demand accelerates, we continue to scale our operational infrastructure in parallel. We expanded manufacturing readiness, increasing production capacity, and strengthening supply chain execution to support large-scale global deployment. We also expanded our international operational footprint with the establishment of customer support centers in Panoram, Bulgaria. These centers materially enhance our global service architecture, improve deployment execution capability, and ensure we are positioned to support sustained multi-region expansion. Collectively, these investments represent the foundation of a global scale organization. In summary, what is unfolding at Custom8 is a clear transition into large-scale commercial deployment. We are moving from pilot programs to structured rollouts. We are transitioning from a smart card provider into a connected retail infrastructure platform. And we are beginning to unlock new revenue layers including retail media that expand the long-term economics of the ecosystem. Physical retail remains one of the largest and least digitized sectors globally. We believe this sector is transforming into an intelligent, connected, and measurable commerce environment in which HZ customers play a significant role. What is most important is that this transformation is no longer theoretical. Our solutions are being deployed today, and our contracted backlog is substantial.