Gorilla Technology Group Inc.

Thank you for standing by. This is the conference operator. Welcome to the Guerrilla Technology Group, Inc. Fiscal Year 2025 Financial Results Conference Call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the call, you may signal an operator by pressing star and zero. Before we begin, we will read the forward-looking statement. Today's call includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigations Reform Act of 1995. These statements reflect management's current expectations and projections. about future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially. Forward-looking statements often include terms such as expects, believes, plans, anticipates, may, should, and similar expressions. For a discussion of important factors that could affect GORILLA's results, please refer to our filings with the SEC. including our most recent annual report on Form 20-F. Except as required by law, GORILLA undertakes no obligation to update or revise any forward-looking statements made on this call, whether as a result of new information, future events, or otherwise. I would now like to turn the conference over to Jay Chandon, Chairman and Chief Executive Officer, and Bruce Power, Chief Financial Officer. Please go ahead.

Thank you very much, Kristen. Thanks, everyone, and thanks for joining. I will keep it crisp. If you want drama, the market's already provided enough already today, so I will stick to the facts. Now, let me start with the headline. We reported a record full-year revenue of $101.4 million. up 35.7% year-on-year. This is the first time in our history we have crossed 100 million annualized revenue. We guided the market 100 million to 110 million, and we delivered inside that range. That matters because credibility matters, and we intend to keep it that way. Now, the more important part is how we got here. We executed a real turnaround. our IFRS operating loss narrowed to about 13.7 million from 66.9 million last year. That was a remarkable improvement of 53.2 million or 79.6% reduction in the IFRS operating loss. Now, our IFRS net loss narrowed to about 11.3 million from 64.8 million last year, an 82.6% improvement. And IFRS basic EPS improved to about 0.51 from negative 6.13, which is a 91.7% improvement. So, yes, it was a proper sweep. It was not just a cosmetic one. We did all of this while keeping the underlying profitability at scale. Adjusted EBITDA came in around $19.1 million, and adjusted net income was about $19.9 million. and with that adjusted basic EPS being 0.89 and an adjusted dilute EPS at 0.88. What I can tell you is that it is strong and it is very disciplined. Now I know what comes next because investors always ask it, how did we do versus expectations. For the fourth quarter, the market consensus was roughly around 34.75 million of revenue and adjusted EPS of 0.30. Based on our portfolio results, our fourth quarter revenue was approximately $35.6 million, which is well above our consensus. And based on the implied fourth quarter adjusted earnings, our adjusted EPS was roughly around 0.37, which is about 22% beat versus the 0.30 consensus. Now, for the full year, the market consensus was approximately $100.6 million of revenue within 0.84 adjusted EPS. We delivered... roughly around 101.4 million of revenue and delivered about 0.89 adjusted EPS, which is about a 6% beat versus consensus. So the message from Michael's side is simple. We delivered record revenue. We delivered a major IFRS turnaround. We delivered underlying profitability that exceeded expectations. Now let's just talk about the broader market because it has been volatile. The market conversation has shifted From did you beat the quarter to will AI spending hold up? And I'm sure all of you have seen this in the last few days and weeks. That is a fair debate, but personally, it misses the bigger picture. AI is no longer a discretionary software trend. It's rapidly becoming a national capability and a core operating layer for enterprises and governments. Now, the next phase of AI demand cannot be defined by one buyer or one deal. It will be defined by many buyers across various sectors building permanent capacity. Governments, regulated enterprises, telecom operators, logistics networks, financial services platforms. This list is long, and the spend is becoming structural. The computer is also evolving at a rapid pace. This is what the market is really missing. Now, AI compute is actually shifting from training-led cycle to an inference-led cycle. This is important because this does not reduce demand. It broadens demand. Inference pushes AI into everyday workflows and mission-critical operations, which increases the need for distributed compute across regional data centers and edge environments where latency data residency, and resiliency requirements matter. Now, this is where edge becomes a major driver. As most of you know, we were one of the leading edge companies when we went public, and we continue to invest heavily. Edge compute expands, and what AI can do, because it moves inference closer to the decision point, is closer to the sensor, closer to customer interaction, closer to regulated data. a force multiplier for adoption in public safety, transportation, logistics, financial services, telecom networks, industrial and the whole series. Now, let us talk about scale of the infrastructure market in our region. We're not kind of relying on slogans. We're tracking the data very, very closely. We have an internal team. We have a research team which is doing that, and we use external data at the same time. Now, we see Asia-Pacific data center investment growing from roughly $30 billion in mid of 2026 up roughly to about $90 billion by 2030, 31. We see installed capacity broadly doubling from about 29,000 megawatts today to about 63,000 megawatts by the end of the decade. Now, Southeast Asia also follows the same trajectory, growing from the low teens to billions towards roughly $30 billion by 2030, as more capacity is being built in the market rather than exported offshore. India is another example. It's scaling very rapidly. From a little over 1 gigawatt of installed IT load today, they're moving towards about 1.8 gigawatts by 2027 and to multiple gigawatts by 2030. We're seeing the same trend in the Middle East. We're seeing sovereign build-out dynamic. with market growth from low single-digit billions to a high single-digit billions by early 2030 as governments and national champions scale local compute and secure infrastructure. This is the structural build cycle we are positioning Gorilla for. So what are we doing in 2026? We are advancing our AI infrastructure and data center build. strategy well across Malaysia, Thailand, Indonesia, Singapore, and the other regions, including Taiwan, and so on. We're expanding our evaluation work in India. We're progressing our strategy in the Middle East, which includes Saudi Arabia, where an MOU has already been signed. And we're very actively exploring data center development opportunities in that region. We're also exploring opportunities to buy and or build our own data center assets. Ownership changes the model. It gives us more control over our delivery and stronger long-term positioning and the potential to build recurring infrastructure-led revenue streams rather than relying on project cycles. Now, in parallel, we are also strengthening our product edge for this next phase of adoption. Our post-quantum cryptography will start to be ready in April 2026. And our local interception product suites remain in continued research and development as we expand sovereign-grade capability across security and intelligence, as well as compliance-led deployments. Now, come 2027, we're also now putting a team together, which will be investing very heavily into 6G local interception as well. Now, we have currently got, what, about 300 full-time employees today, a little over 200-plus contractors working on all the projects we've signed. But based on just the projects we have recently signed, we anticipate growing to about 1,200 to 1,500 full-time employees by mid-June next year. And that would be about an additional of roughly around 700 to 800 contractors. So we'll have roughly between 2,000 to 2,500 employees for the company at any given point of time. Now, investors want proof. They want execution, not a narrative. I will speak directly about the things that matter. Delivery and collections, more about the cash conversion. Our top customers are progressing very strongly, and our customer satisfaction is reflected in our payment behavior. In the first two months of 2026, we've collected more than $22 million from our largest customers for solutions delivered and endorsed in 2025. We also expect meaningful collections in the coming weeks. Now, we finished the year 2025 with about a total cash of $104.8 million. But what was very important that we did all this by reducing the total debt load to about $13.8 million, which is 35.6% lower from the $21.4 million in the prior year. Now, through the refinancing of certain lending agreements and the repayment of others, we also reduce our debt, releasing more than 5.3 million of deposits previously held as collateral against some of these loan obligations. Now, this kind of balance sheet gives us very meaningful flexibility to execute existing programs, fund working capital through delivery cycles, and scale our infrastructure strategy with discipline. Now, we've also spent, at the same time, more than $11 million on buybacks today, which we believe the market continues to undervalue Gorilla relative to our performance and our strategy. You know, personally, I think you could call this confidence. I call it arithmetic, right? Why? Because that leads me to my next point. We're aiming to be cash flow positive in 2026. That's not just a slogan for me. It's an operating objective that comes with very disciplined delivery disciplined overhead control, and a very disciplined cash collection. And finally, a lot of people have asked me this question over and over again. Gorilla technology capital. Personally, it's a game changing catalyst for our next phase. It's designed to expand our ability to execute larger infrastructure programs by structuring capital efficiently, aligning long duration funding with long duration assets, as well as enabling our customers to move faster with clear financing pathways. Some people said, hey, maybe they're buying the bank. No, we're not buying the bank. You guys have to understand what Gorilla Technology Capital does. It strengthens our ability to scale data center builds, accelerate GPU infrastructure deployment, and more importantly, participate materially in larger mandates with institutional-grade structures and governance. If I summarize 2025 in one line, we delivered a historic revenue milestone. We executed a major profitability turnaround. We strengthened the balance sheet and positioned Gorilla for the next phase of AI infrastructure, which is sovereign and regional, more importantly, distributed, which is becoming increasingly edge-enabled. In 2026, we shift from proving we can deliver to scaling what we can deliver. Converting execution into cash, expanding our data center footprint across India, Malaysia, Thailand, Singapore, Indonesia, Middle East, and more importantly, using guerrilla technology to unlock materially larger programs without compromising. while accelerating our product roadmap, which means we're investing heavily into R&D. Thank you for your time. I will hand over to Bruce, who knows the numbers well enough to recite them without blinking. Bruce, please go ahead.

Thank you, Jay. I think you covered the main points in terms of the financials. I wanted to hit on a few things. So first of all, we mentioned that the cash balance at the end of the year was $104.8 million. I'd just like to emphasize that due to the collections so far this year, the cash balance actually increased. So as of the 26th of February, it was 108 million of unrestricted cash and 116.6 of total cash. That is in spite of spending $3 million this calendar year, so in the last two months, on share buybacks. So we have been able to increase cash and also buyback shares this year. So it's a strong start to the year. The other thing I would point out is when we talked about freeing up the debt load or reducing the debt load and freeing up cash deposits, some people ask, why didn't you pay off all of the debt? Well, the debt that we have remaining, the 13.8 million is at an average interest rate of 3%. So to be blunt, it makes sense to keep it as flexible capital instead of repaying it and borrowing at higher rates. The last thing I would talk about is We issued guidance last year of $137 to $200 million as the revenue guidance range for this year. We are maintaining that. At this point, we're not prepared to issue gross margin or EBITDA guidance, but stay tuned in the coming months. We announced that basically the range for why is there such a wide range for $137 to $200 million, it depends on the delivery schedule. of certain data center projects we're pursuing with Frere and also with others. That, I think, will have a very good update coming in the next month to month and a half about the timing of those projects, about the delivery schedule from NVIDIA, and then also with the customers. And that should help to firm up the guidance and give you a better idea. With that, I'd just like to reinforce what we mentioned in the press release. What Jay said, we believe that the balance sheet has improved to the point where we're able to fund our growth initiatives and also to buy back the shares if we feel that they're undervalued and that we can take on a lot of the growth projects that we've talked about, not just the increase in revenue this year, forecasted to be in the middle of the range would be almost a 70% increase, but also the contracts that we have in the pipeline. So a $7 billion revenue opportunity in the pipeline We believe that we can fund substantially through the access to debt facilities, mostly through project finance, and then through the cash that we have on the balance sheet at the moment. With that, I'd like to turn it back to Jay. And if you want to open up the questions, we can do that.