Gorilla Technology Group Inc.

Good morning and welcome to the Guerrilla Technology Group's third quarter 2025 financial results conference call. All participants are in a listen-only mode. After the speaker's remarks, we will conduct a question and answer session. To ask a question at this time, you will need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to our speakers today. Jay Chandon, Chairman and Chief Executive Officer and Bruce Bower, Chief Financial Officer. Thank you. Please go ahead, gentlemen.

Thank you very much. Good morning, everyone. Q3 marks the strongest quarter in Gorilla's history with revenue ahead of expectations, operating profit firmly positive, and the bottom line at break even. Now, we've delivered a clear swing in profitability. We've built a cash position about over $119 million. We've reduced debt to $15.1 million. And we've advanced our AI infrastructure programs across Southeast Asia, Latin America, and the Middle East, securing multi-billion dollar projects. But at the same time, we're also creating an historic pipeline for this business. The simple message is that Gorilla is now operating above the analyst model. and scaling faster than the market expected. Thank you. Ruth, anything you want to say?

Yes. I'd just like to take a walk through some of the highlights from the quarter and then in terms of where we are overall. So the first, as Jay mentioned, was it was a record quarter for us in terms of revenue. The balance sheet, as Jay mentioned, $121.4 million of cash total. That breaks down to $109 million of unrestricted free cash and then the balance and restricted cash. Debt of $15.1 million means that we're in a significant net cash position of $106 million. This follows on the performance of the business and also in terms of what's helped by a fundraise that we did in July. In terms of where we are as a business and how we're performing, you can see that we're on track to meet the guidance for 2025, which is in the range of 100 to 110 million in terms of revenue. And then we were talking about EBITDA margins in the 20% plus range and net income margins in the 15 to 20% range. So we remain on track to hit all of those. The gross margins through the nine months have been a bit over 35%. That's a little bit lower than we'd expect for the full year, so I think that we'll be on track to hit the 35% to 40% range for the full year. At the end of the quarter, we had accounts receivable of $36 million, and I know people are looking at that and worried. I'd just like to say that we expect the business to be collecting some of those we've already collected on in the fourth quarter, a couple of significant outstandings in Asia, and then some remaining in the Middle East we expect to collect on. For the nine months of the year, we had operating cash flow of minus 15 million, and we still expect to either have break-even or positive operating cash flow for the total year. Another thing, speaking about going into the next year, is we issued guidance for the next year of 137 to 200 million. I just wanted to talk a little bit more about how that works, and Jay can help me out as well. But basically, this is how we... Forecast guidance is based on contractual backlog, which is the revenue that we expect to realize from signed contracts, and then also where we have delivery timelines and specified contractual milestones. In this case, we have a signed contract, and in the case of 2026, we have a large signed contract with Frere, and we have individual deployment as part of that contract. The timing is more or less certain, but still subject to some change. which is why we opted for a wide range to reflect our conservatism in making our guidance. Nonetheless, the fair contract is still a large contract at $1.4 billion overall. So that means, you know, over 400 million annualized. And that will be, when up and running, you know, 400 million annualized. But the rollout will be through 2026. So the contribution will hit starting in 2026, but it's still, you know, it won't be the full amount. Nonetheless, we also have a strong pipeline, as we alluded to, which Jay can talk about in a second, which makes us optimistic about hitting the four-year guidance for 2026. A couple other things to point out about 2026 is we have been talking to the market for a long time now about about where we're going to grow, diversifying the business and de-risking it. What we've seen is that the contract wins and then the pipeline is mostly in Southeast Asia, which would lead to us hitting our target of over 50% coming from Southeast Asia next year. It's also a good mix between governments and enterprise. So we'll be diversifying and reducing the government share of our revenue. And then the corporates are investment grade, and then the government clients that we're talking to or that we've converted are investment grade as well. So we see an improving credit quality from our end customer. All of this points, I think, to an improving business mix, a diversified revenue base on all measures, and then improving client quality. The last thing I'd like to do is Jay is a bit too modest to do this, so I'll do it for him. is the tri-record is now piling up to the point where I think we have many proof points. When this business went public in 2022 via DSPAC, the revenue for that year was $22 million. The guidance for this year is $100 million to $110 million, so that's obviously a significant increase in a short period of time. Looking at the guidance for next year, that marks two things. One is it's a large, absolute increase The second is that the percentage growth rate actually for next year would be an acceleration over the percentage growth rate for 2025. So, it's, I think, quite a testament to the management team to see an improvement in the revenue growth rate and also, you know, after a five times increase in revenue since going public. And then, that's not the only highlight. Several other highlights. So, first of all, we have, as I mentioned, over 100 million of net cash. This is after being in net debt when we went public. We had a very painful or even toxic financing mix earlier in 2022, 2023, all of which has been cleaned up. So the cap table is almost all common equity. And then when we talk about winning new contracts now or executing on contracts that we've signed, looking at the balance sheet now, we have the ability to fund significant new deployments from our own resources and then from project level finance that we have on the table from several banks. So we anticipate overall a good year to finish up in 2025. We're quite excited about the outlook for 2026. And then with that, I'd like to turn it over to Jay for anything else that he'd like to add about the outlook, the pipeline, et cetera.