Cloudastructure, Inc.

Greetings. Welcome to the Cloud Structure, Inc. year-end 2025 Business Update Conference Call. At this time, all participants are in a 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. Please note this conference is being recorded. I will now turn the conference over to your host, David Waldman, Investor Relations. You may begin.

Thank you, Holly. Good afternoon, and thank you for joining Cloudastructure's fourth quarter year-end 2025 earnings conference call and business update. On the call with us today are James McCormick, Chief Executive Officer of Cloudastructure, and Greg Smitherman, Chief Financial Officer. Earlier today, the company issued a press release announcing its operating results for the three months and year-end of December 31, 2025. The release is available on our website at www.cloudstructure.com, and our Form 10-K can be found both there and at www.sec.gov. If you have any questions after today's call, please contact Crescendo Communications at 212-671-1020. Before Mr. McCormick reviews the company's operating results for the quarter near end of December 31, 2025, and provides a business update, I would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations are forward-looking statements. The words aim, anticipate, believe, could, expect, may, plan, project, strategy, will, and the negative such terms and other words in terms of similar expressions are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations strategy, short-term and long-term business operations, and objectives and financial needs. These forward-looking statements are subject to several risks, uncertainties, and assumptions as described in the company's filings with the SEC, including the company's annual report on Form 10-K for the year ended December 31, 2025. Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this conference call may not occur, and actual results could differ materially and adversely from those anticipated or applied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the company believes the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. In addition, Neither the company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements except as required by law. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements, as well as others made on this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. I would now like to turn the call over to James McCormick, Chief Executive Officer of Cloud Instructure. James, please go ahead.

Okay. Thanks so much, David. Good afternoon, and thank you for joining Cloud Astructure's fourth quarter 2025 earnings conference call and business update. We would like to apologize for shifting the call out one day, but we're glad that we could be with you here today. 2025 was a very important year for cloud structure, not just because of the growth we delivered, but because of what that growth tells us about where the market is going and how we're positioned within it. We grew revenue 271% to just over $5 million, driven by broad-based growth across our business. Customers are adopting more of our platform, expanding deployments across additional locations, and increasingly standardizing on cloud as structure as their long-term solution. And this is reflected in a 342% increase in total contract value year over year, highlighting a clear shift towards larger multi-site deployments and deeper customer adoption. This momentum is being driven by a fundamental shift in how organizations approach security. Traditional models are reactive. They record incidents after they happen, while customers today are looking for something much more proactive. They want to detect issues earlier, respond in real time, and ultimately prevent incidents altogether. And that's exactly what our platform is designed to do. By combining AI driven video analytics, cloud based infrastructure and remote guarded, we are able to identify potential threats and intervene before they escalate. We're seeing that translate directly into measurable outcomes, including a 98% real time deterrence rate across deployments. And also as a reference point, excuse me. Estimates are out that say that there are 1 billion security cameras deployed on a worldwide basis now. And those 1 billion cameras capture 1.44 trillion minutes of video each day. And a substantial portion of that 1.44 trillion minutes is not proactive. So just think of the opportunity that's available at that scale. So the demand is showing up very clearly in multifamily housing, which continues to be one of our strongest verticals, where property owners are dealing with rising crime rates, increasing liability exposure, and higher insurance costs, and they're actively looking for more effective solutions. As a result, we've now secured contracts with six of the ten largest property management companies in the U.S., according to the NMHC 50 rankings. What's particularly encouraging is how those relationships develop over time. Customers typically begin with a single site deployment, and once they see the results, including measurable reductions in incidents such as car break-ins, vandalism and unauthorized access, along with faster response times and lower overall security costs, they expand across additional properties. We also saw a significant increase in total contract value during the year, driven by larger multi-site deployments and deeper customer commitments as organizations move to standardized security across their portfolios. In 2025, we saw multiple customers transition from initial deployments to broader portfolio rollouts, in some cases moving from a single property to multi-site implementations within the same ownership group. That transition from single site to portfolio-wide deployments is a key driver of our growth and supports long-term recurring revenue expansion. Building on that momentum in multifamily, we're also expanding into different verticals, including construction, logistics, and distributed infrastructure environments, where security challenges tend to be more complex. These are areas where provisional approaches often fall short and where our ability to monitor, detect, and respond in real time provides a clear advantage. At the same time, we've continued to invest in expanding the capabilities of the platform itself. During the year, we introduced mobile surveillance trailers, rapid deployment security enclosures, and solar-powered monitoring systems designed for off-grid environments. These solutions allow us to bring our technology into locations where traditional infrastructure may not be practical, such as construction sites or remote facilities. More broadly, we're focused on building a unified hardware agnostic platform that allows customers to integrate multiple camera systems and security devices into a single environment that can be monitored and analyzed centrally, which becomes increasingly valuable as they scale. As adoption grows, we're also seeing our platform scale operationally. Over the course of the year, our system reviewed approximately 11.2 million alerts and supported more than 112,000 live verbal interventions, which gives you a sense of both the volume we're managing and the level of real-time engagement across customer deployments. And at the same time, our AI detection accuracy has reached approximately 96%, helping us minimize false alerts and focus on meaningful events. As a result, less than 1% of incidents require escalation to emergency services, meaning the vast majority of situations are resolved proactively before they become more serious issues. All of this is reflected in how customers are responding. We are seeing very strong satisfaction in retention metrics including a 100% customer satisfaction score, a net promoter score of 100+, and approximately 99% customer retention. These metrics reflect not just adoption, but long-term value, as customers continue to see improvements in safety, operational efficiency, and cost management. That performance has also been recognized externally through multiple industry awards, reinforcing our positioning as a leader in AI-driven security. So when we step back and look at 2025 as a whole, what stands out is that the model is working. We are seeing strong demand, continued expansion within existing customers, entry into new verticals, and clear validation from both customers and the broader industry. At the same time, we believe we're still in the early stages of a much larger shift towards AI-driven security, and as organizations continue moving towards more proactive solutions, we continue to see a significant opportunity ahead. As we move into 2026, our focus remains on scaling the platform, expanding enterprise adoption, and continuing to build on the momentum we have established. And with that, I'll turn it over to Greg to walk through the financials in more detail. Greg?

Thanks, James, and good afternoon, everyone. As James mentioned, revenue for the full year 2025 was $5.1 million, representing a 271% growth compared to 2024. This was driven by expansion across all areas of the business as adoption of our AI-powered video surveillance and remote guarding platform accelerated. We saw strong performance across each of our revenue streams, with cloud video surveillance revenue increasing 137%, Remote guarding was up 150%, hardware revenue up 329%, and other revenue, including installation and additional subscription-based services, increasing 410%. This growth was supported by continued expansion in customer commitments and larger contract sizes, reflecting increased adoption of the platform across customer portfolios. Cost of goods sold for the year was 3.6 million compared to 1 million in 2024, reflecting higher hosting costs, increased hardware sales, increased installation activity, and the operational support required to scale the platform alongside this growth. From a profitability standpoint, gross profit increased to 1.5 million, up approximately 304% year-over-year, which highlights the scalability of the model as revenue continues to grow and contributions from our various products and service offerings expand. At the same time, we continue to invest in the business to support that growth. Operating expenses for the year total $9.7 million compared to $6.6 million in 2024, reflecting increased investments in product development, sales and marketing, and corporate infrastructure as we continue expanding and scaling the platform. General and administrative expenses were 2.4 million compared to 1.2 in the prior year, driven primarily by higher payroll and consulting expenses as we scaled the organization as a public company. Net loss for the year was 8.5 million or 48 cents per share compared to a net loss of 6.5 million or 45 cents per share in 2024. These results reflect the company's continued expansion of the platform and investments to support long-term growth and scalability. EBITDA was negative 5.5 million in 2025 compared to negative 4.4 million in 2024, with the change primarily driven by higher stock-based compensation and non-cash interest expense. From a balance sheet perspective, we ended the year with approximately 8.5 million in cash and 8.6 million in working capital supported by a debt-free balance sheet. We believe this positions us with a strong financial foundation to continue investing in growth initiatives while maintaining flexibility as we scale the business. Overall, we're encouraged by the combination of strong revenue growth, expanding gross profit, and continued progress in building a more efficient and scalable business model. That concludes our financial review. Operator, please open the line for questions.

Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Your first question for today is from Jack Vanderaarde with Maxim Group.

Great. Good afternoon, James and Greg. I appreciate the solid update. Thanks for taking my questions.

Of course. How are you, Jack?

I'm doing well, guys. So, James, maybe I'll start with, you know, clearly the property management vertical that you guys are targeting is rapidly expanding. You have active relationships with six of the largest property managers in the U.S. Can you maybe just, I guess, touch on your overall install base and just the number of your active locations today? How has that ramped, I guess, in the last year? It sounds like quite aggressively. And then just based on your discussions recently and looking forward, how does this play out? Are we going to see these kind of growth rates and expansion going forward? Just circling around this number of active locations, if you could.

Yeah, sure, sure. Good question. So we have over, I think the number is, Greg can correct me if I'm wrong, 150 active locations right now. And if you think about it, just the six of the top 10 that we work with, have something like over 1.2 million units under management. That's not properties, that's units. But still, these are just really big, really strong numbers. And I think what we are seeing right now, as we mentioned in our comments, is that in the past couple of years, we would get into a particular property and then hope to pick off another one from that same management group and then another one. But what we're starting to see, like in the Denver area, we put a press release out in this, you know, people are now going and saying, hey, we want you to take over our entire complex of five buildings right from the start. So we're just seeing a number of shifts like that. And We consider or we believe that multifamily will continue to be an important vertical for us in 2026 and beyond. But we're also really enthused about some of the work that we're doing and some of the pilots that are going on and some of the additional verticals as well. So there's a lot to look forward to.

Excellent. It sounds like it. I'm just trying to grasp the overall opportunity relative to where you are today. It sounds like there's plenty of blue sky and untapped slow-hanging fruit. Great way to put it. Great way to put it. Can you maybe just – part of the other side of the equation then is also all this blue sky and room to rums. The other side of it is what's your existing capacity and bandwidth to actually, you know, how fast and quickly can you actually activate these properties and deploy these properties? I think in the past you guys were able to support maybe 20 new locations per month. Is that still the case? Where is that side of the equation today?

Sure, sure, sure. I think there's two pieces to that answer. there's the physical installation piece, which is what you're referring to, and then there's the back-end systems. So from a back-end system standpoint, we're very confident of our capacity and ability to deal with the growth that we have projected for 2026 and beyond, just as a reference point. we are now processing approximately 9 million videos a day, okay? So that's on the backend piece. As far as installations go, we are expanding our pre-sales capabilities that supports installations. We are expanding our network of third-party installation partners to help us with getting with getting these projects implemented and up and running. And I think the easiest way to put it would be, yes, in the past, we would deal with something like 20 deployments a month. I would say that you could anticipate that we will see that increase by 50% or so as we start to get into the second half of 2026.

Excellent. Okay, great. I appreciate that. And then maybe a question for Greg on some of the nuts and bolts of the numbers here. Greg, if I'm trying to get a sense of the annual recurring revenue run rate or the ARR, just based on the fourth quarter results here, it looks like things have been picking up on that and quite rapidly as well. So if I were to add the cloud video surveillance and the remote guarding revenue streams, That's more than $500,000 in the fourth quarter alone. So it seems like this implies that ARR is now well above 2 million. Is that a fair way to assess that? And just what is the general trends with ARR going forward?

Yeah, Jack, great question. 100%, that is spot on analysis. Our current ARR or year ending ARR was over 2 million. So we had kind of 2 million in the bank just to start off, and just like with any other SaaS company, that is a relentless driving force, really pushing the company forward. And we see that continuing. We are quite bullish on where the company is going. We expect and we've got very strong growth targets for this year. We're not putting out specific guidance, but We'll just say we've got some pretty strong growth, internal growth targets that just like you saw where recurring revenue at the end of 2024 was substantially smaller, under a million dollars kind of coming into 2025, we're over two million coming into 2026. I think that kind of progression is what you would typically see out of any SaaS company, and we are certainly shooting and driving for that. I do, before we go to your next question, I just want to, I misspoke earlier when I was giving our financial reports and I had said a loss of 48 cents a share for the year. I meant to say 55 cents, just glanced at the wrong number. My apologies for that. Everything else was correct in that, but I just wanted to make sure I got that correction in before we moved on.

Got it. No worries there. No worries there at all. And so I guess it sounds like, though, that the ARR trend, though, is definitely ramping up quite aggressively. And this is higher margin. This is high margin software revenues as well. And can you maybe just touch on – the two are kind of interconnected, that cloud surveillance service, the base core offering, and then remote guarding. Can you just touch on the attach rates and just the overall ASP, I guess, of that offering specifically? you know, if you're selling both together combined at more properties, I'm assuming that lifts the ASP as well. Can you maybe just touch on the trends of attach rates and ASPs?

Sure. So, you know, when, when we right now are, are sort of ASP for surveillance is about $35 per camera per month. And for remote guarding and, about $79 per camera per month. Depending on the size and the length of a contract that someone wants to sign and a variety of things, there might be some discounts offered off of that. But that's sort of the starting point. And the remote guarding, one of the great things about the remote guarding is that the core surveillance product has the bulk of the features. It's got all the AI, right? We process that. It's got alerts because customers can get their own alerts in addition to going to our guards. It's got all the storage. It's got the review capability. It's an incredibly robust platform. And the remote guarding really just seamlessly layers on top of that. And so the only incremental cost for us, for the most part, is the additional the addition of the humans in the loop, which we feel is an incredibly important component, especially if you are going to have to call emergency services. You want to make sure that someone has eyes on what the issue is, can direct the issues, and motivate people to get there like, I'm seeing this happening right now. It's much more important than, oh, an alarm went off and we think something might be going wrong. So we think humans in the loop are incredibly important. powerful but that really layers on top so that's a very nice addition and as customers see the performance you know they initially don't start with all of their cameras guarded but as they see the performance and they see the value and they see the prevention of problems they come back and say you know what we'd like to add a couple more cameras we'd like to increase the value that we're seeing there So it's great, and while it's very good margin and we do anticipate margins to continue to expand, we still expect and want all that other revenue because that's saying we're getting new customers and we continue to expand and we continue to grow. And so I don't see any of that slowing down in the foreseeable future. which is a good thing for the company.

It sounds like it. I appreciate the color there. Maybe just one more question, then I'll hop back in the queue for James. James, just based on all the discussions you've had recently and just the tone of discussions, what are some of these new verticals maybe that you're getting excited about, most excited about? And also, what's the level of urgency and just kind of awareness now from your end customers, regardless of vertical, just do they know what you guys bring to the table now? Are you feeling like they're coming to your door? Just what are some of the things that you're getting excited about outside the multifamily property space and then also just the tone of your overall discussions and the level of urgency and awareness?

Yeah. Yeah, another good question. No clunkers so far, Jack. Here's what we would say. There's a couple verticals. All the verticals that we mentioned, remote infrastructure, construction, that kind of stuff, we're really excited about. But there's two that I think we have made additional progress in so far in 2026 that we think holds just really, really large potential for us. One is, let's just call it transportation and logistics. That's one. And the other one is commercial properties. And, you know, is it people are coming to us? I would say it's kind of 50-50 right now. Because of the success we've had in the past in demonstrating what our solutions can do, what they offer, it's becoming easier for us to get people to understand how we can support them in their particular vertical. So, for instance, I'll give you a couple generic thoughts. One would be in transportation and logistics, think a couple things. Think secure truck yards, right? Cargo theft is just It's out of control. So, you know, someone driving a big rig now has to worry not just about, you know, being on the road and following those kinds of rules and regulations, but if they go somewhere to, you know, nap or rest or whatever, they have to worry about someone breaking into their, into the trailer, right? Thieves don't generally know what's in there, but they know it's valuable. and we are finding now that you know with certain customers that have secure parking facilities our solution is a perfect perfect um answer to to provide safety and security for those folks another is um Think of any larger package delivery company. Companies that are delivering millions and millions of packages a day. We think there's a lot of opportunity there as well from a standpoint of, again, external threats, but also just keeping the internal employees honest as well, if you will, right? So there's all sorts of interesting opportunities there. Commercial properties, not, you know, think malls. shopping malls, not necessarily protecting the interior of the facility, but the exterior to keep things safe at night from people having or trying to get egress into the building. But maybe as importantly, the human factor, think about employees you know, that are, you know, locking up the storefronts, going to their cars where it's dark out. We have solutions, you know, like with mobile trailers and other things where we can provide a protected environment for those people so they feel safe when they're going back to their cars at the end of the day. So there's a couple of the verticals we're very excited about. in addition to multifamily, which continues to be a centerpiece for us as well.

Excellent. Well, hey, I appreciate the time, gentlemen, and wish you best of luck and continued growth momentum. Wish you best, and I'll hop back in the queue until next time.

All right. Sounds great, Jack. Thanks so much.

Thanks.

Your next question for today is from James Kistner. with Water Tower Research.

Hi, guys. Congrats on a nice year. So thanks for taking my questions. Of course. I guess you guys have done so much innovation in the last year. I know these things are all kind of new, but maybe this kind of ties to your answer on vertical. So I'm just kind of curious, are there any of these new offerings that are kind of getting more traction than others or perhaps driving more sales or maybe just have more interest amongst the four or five different kind of new things?

That are percolating. Yeah. Yeah, James.

I think both the... We're very optimistic and we're seeing some initial traction with both the powered enclosure and the solar-powered enclosure. It's more... useful in remote locations where there's essentially no infrastructure, right, as construction goes on. And, you know, what's an enclosure? Well, it's basically taking the brains of our fixed systems that we would put into a commercial property or a multifamily property and just incorporating and encapsulating it into a smaller form factor that can be mounted on a pole, on a building, those sorts of things. So it makes it easier to deploy our solution. And we're seeing some very good early successes with that. And I think we'll also continue to see some some good growth in the mobile security trailer offerings, particularly as, you know, we mentioned a little bit with helping to protect commercial properties, construction sites, those sorts of things.

Okay. This is James. Can you hear me?

Yeah, I can hear you.

Yeah, so as soon as I finished my question, the phone hung up. So whatever you just said, I'm sure it was great.

Oh, my God. It was spectacular.

I assume that it wasn't Greg just slamming the phone down on me. That's never happened to me before. So we'll blame my phone. So anyway, I will go back to the transcript to get the full answer. I think I caught the end of that. Okay, yeah. So just to... maybe you just talk about it too with all the momentum, you know, I think, I know I'm modeling Q1 down and I don't think you're guiding by quarter, but maybe you're going to talk about seasonality and you know, whether or not we should, you know, Q1 should be kind of a light quarter or, you know, if it makes sense to keep doing that or just in general, if there's any seasonality that is through the year.

Yeah. Uh, great. I can answer that, but you want to answer that one?

Yeah, sure. Well, uh, I think it's an excellent point. If you look historically, Q1 is always the smallest quarter of the year for us. We really build momentum towards the end. If you look at last year, Q4, we had a spectacular Q4. But oftentimes Q3 is our largest quarter. But certainly the second half of the year has always historically been stronger for us than the first half. And new budgets, people are trying to figure out their plans for the year. So, yeah, there is a little bit of seasonality and ramp up over the year. Absolutely.

Yeah, and I think, James, maybe just to put a little bit more of a point on that, I think what we find is that in Q4, A number of customers are, you know, it's the end of their fiscal year. They're trying to get, you know, decisions completed and contracts executed before the end of the year. So there's, you know, there's that Q4 momentum that seems to take away as well a little bit from Q1. So, but yeah, but again, we're very optimistic about 2026 in general.

Okay. That's helpful. Um, what about, so I'm going to, I'm going to kind of drill into Q4 a little bit and I don't want to embarrass myself cause I have to do some math, but installation revenue up quite a bit in Q4. Um, you know, and if that's the case, I don't know if that's a leading indicator of additional revenue, um, down the road, or you can comment at all and kind of like if the quarter was kind of how, how you thought it might end up, you know, in terms of mix and you know, how that might progress kind of, kind of going forward.

Yeah, I'll start with that. Insulation revenue was up pretty significantly, which is, as I had referenced earlier in the call, that's what we want, right? That means new customers, new sites getting installed, more growth, which will end up driving more recurring revenue. Obviously, we recognize revenue as we provide the service. So while someone may sign up for a year contract, that revenue doesn't get recognized right away. It gets recognized over the 12 months that it's provided. So with a big installation, yeah, that's going to – we get the installation revenue in Q4, and then that adds to this relentless nature of the – recurring revenue that just keeps building and building and driving momentum and driving profitability as we continue to build the business.

Is it fair to say there's kind of like a quarter or so of kind of lag between installation revenue and cloud services or other revenue?

No, I wouldn't say it's quite a full quarter because once the install is done, the recurring revenue starts. We start generating that revenue. But as with anything, while we had some pretty good-sized contracts, it's also for service over the years. That revenue continues to slowly build month by month by month on forward. But yeah, as soon as that installation is done, we start providing the service. There's not a lag in that continued increase.

And the cost kind of disappears, too, right? And the cost is kind of one-time in nature, too, as it kind of hits those insulation cogs.

Right. Yep. That's a one-time cost.

Yeah, the cogs hit in the period that we recognize the revenue.

Perfect. So you're sort of in the opposite direction on cost. It seems like, at least if I backed into it, right, sales and marketing looks like it might have been down sequentially and Just wondering kind of if that's right and how to kind of think about your investments in sales and marketing, you know, given what a high-growth company you are. I'm kind of expecting to continue to go up generally, but any kind of sort of idiosyncrasies in Q4 on that front, perhaps with the quieter border? Sales guys going home for vacation or Christmas or what have you, less conferences.

What are your thoughts? Certainly less conferences, and those can be a lot of travel and everything else that can drive it. But, yeah, I didn't really think of it as significantly down. But, yes, there are some – There's just not a lot of – we're focused on closing those deals and driving towards the end of the year. So, yes, I think the conference of travel is where you see it most.

And, James, I would also – well, hold on, James. I would also add, though, as we look at 2026 and beyond, but specifically 2026, I think you will see that we are making additional investments in sales and marketing. Specifically, sales from a, let's just call it a sales infrastructure standpoint, we continue to beef up and add to our sales reps. And we're finding... You know, we now have an ability to land very experienced people with, you know, knowledge of the AI security space, which is incredibly helpful. And, you know, as you would expect, as we continue to grow in 2026, we'll continue to invest in sales and marketing.

Okay. And lastly for me, just kind of being a little modeling clunker, just In terms of how you think about cash from operations, I think you talked about kind of that gradually improving, like less burn over time. Any updated thoughts on that? It actually came in a little better on cash usage this quarter than I expected. Brad?

Can you say that question again?

I wasn't quite sure what you were asking.

How are you thinking about cash usage kind of through the year? I think that you previously said that you thought you kind of like used a little less on a quarterly basis, maybe not monotonically or consistently, but directionally, that your cash burn would be reduced. I'm just kind of curious how you're thinking about that.

Yeah, so we continue to grow the business. As we grow, there will be additional cash use for Although we are a very CapEx-like model, but we will have periods where we continue to beef up our core servers and core infrastructure. And while our overall expenses will continue to decrease because we are, as James said, investing heavily in sales and marketing, growing the team, expanding the business, revenues are also coming in. So we anticipate cash burn to... continue to decrease over the year. We feel we're in a good, you know, we ended the year very strong cash position. Certainly we feel, you know, cash for more than a year. How much more will depend on how fast we achieve our growth and continue to drive our profitability, but we feel very good about our cash position and our ability to keep costs under control, and really we're spending focused on hitting that growth and servicing our customers. But cash will continue to be invested in the business, but overall cash burn will continue to decrease as the year goes on.

All right, very good. Thanks, guys, and congrats.

Thanks a lot, James. Glad your phone stayed on.

Once again, if you would like to ask a question, please press star 1. Your next question for today is from Ellen Litczak with Force Capital.

Thank you guys so much for taking my question. I really appreciate it. Thankfully, Jack and James actually did a lot of work for me and asked a lot of the questions that I wanted to ask, which makes my job a little bit easier. So I just have one question for you. And you actually touched on this a little bit already, but maybe you can expand on margin expansion and the path to profitability as revenue skills.

Sure. Greg, again, right? I'm happy to start off, but do you want to take it?

Sure. We saw a significant increase from 2024 to 2025 on our margin. We expect that to continue this year. That is tempered somewhat, I will say. We do have, as I said earlier, internal strong growth plans, and part of that strong growth plan will continue to be new installations, which is our lowest margin business. So I don't look at that as a bad thing. I look at that as an exceptionally positive thing. But over time, as the recurring revenue just continues to build, margin expansion will continue. And we absolutely expect you will see that in a slowly widening margin throughout the year. But I wouldn't want that to be too fast, frankly, because I want to have as many new customers, as many new installations, because that just will grow everything, the whole pie, faster. We are focused on building a much larger, sustainable business, doing it profitably, making sure we are good stewards of the cash, and making sure that everything that we are doing has positive margins. But for the nip of the margin, I'm less worried about how fast it expands. I'm more concerned that it just continues to expand. And as that happens, we'll continue to drive towards profitability.

No, I totally get that. I mean, you guys have done such a great job so far, but thank you again for taking my question.

Yeah, absolutely. Of course. Thank you.

We have reached the end of the question and answer session, and I will now turn Nicole over to management for closing remarks.

Okay. Thank you.

And thanks, everyone, for listening and for digging in a little bit from a question standpoint. As we look back on 2025, we are very pleased with what the company has accomplished during its first full year as a public company. We delivered significant revenue growth, expanded our customer base, advanced our technology, and demonstrated the real-world impact of our platform across multiple industries. What's most encouraging is the momentum that we have built. We're seeing customers expand deployments, increase their commitment to the platform and standardize cloud structure more broadly across their portfolios while continuing to enter new verticals and enhance our platform in ways that drive meaningful results. Looking ahead, we believe cloud structure is well positioned to continue building on that momentum with a scalable platform, growing enterprise adoption, and increasing demand for more proactive security solutions were focused on executing and driving continued growth. We have a management team, a board of directors, and a dedicated group of employees that are passionate about our mission and our business objectives. As we continue to grow and scale our operations, we will all work even harder to identify opportunities and eliminate obstacles. And all of this means that we're very excited about the direction of the business and the opportunities in front of us, and we remain committed to building long-term value for our shareholders. Thank you again for your time and your continued support, and have a great day. Thank you.

This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.