Gorilla Technology Group Inc.

Thank you for standing by. This is the conference operator. Welcome to the Guerrilla Technology Group, Inc. first quarter 2026 financial results. 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 the store, then the number one on your telephone keypad. Should you need assistance during the conference 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 Litigation 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 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 admir-takes 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 Chandan, Chairman and Chief Executive Officer, and Bruce Bauer, Chief Financial Officer. Please go ahead.

Thank you very much. Thanks, everyone. Thanks for joining. Bruce and I are going to keep this very direct today. Q1 was not a very quiet quarter. For us, it was, you know, not an accounting quarter which was wrapped in a bow. It was one of those quarters where everyone smiles politely, Bruce and I read from a script, pretends that the world has changed because someone added AI to the script and the release. Also, I am not going to be reading from a piece of paper today. Now, Q1 for me was the quarter where Gorilla moved from turnaround into scale. And scale is not always pretty in the first few innings. Anyone who's actually built a business and something meaningful knows that. You do not build the data center campus, you do not secure power, buy hardware, deploy GPUs, hire people, expand products, and move into sovereign AI infrastructure without creating some noise on the P&L. If anyone expected a perfectly polished quarter while we are building the next version of this company, they may also believe that the British sunshine arrives on schedule. So charming idea, rarely accurate. Now let me start with the facts. We delivered US dollars 28.2 million of revenue, which is up 55% year on year. More importantly, we turned operating cash flow positive. Let that sink in. Net cash from operating activities was $6.6 million, compared with the cash more importantly used in operating activities to about 10.7 million in Q1 of last year. Now, this is a huge swing. It's a positive swing, about $17.3 million of improvement, or 162% swing. Now, on top of that, we ended the quarter with a little over $98.4 million of cash, which is up 373% year-on-year. Let me put that in plain, simple English. Revenue grew. Our customers paid us. Operating cash flow turned positive. Cash stayed strong. On top of that, this is not just theory. This is not market theater. This is execution landing on the cash flow statement. Now, the reported operating loss of about 41.1 million, that number, you know, you should stop reading there. If you stop reading there, and if you look at the business, then you've not actually missed the business. The loss was heavily distorted by two major items. The 20.9 million stock compensation, which has been due for a better part of three and a half years. We have to take that in. Second, you've got a US $18.9 million of foreign exchange losses. Together, combined, that's about 97 plus percent of reported operating loss. Now, excluding those items, the underlying operating loss of the entire company was only $1.2 million. Now, that's real context. So, no, it was not a $41 million reflection of the operating business. This was an accounting-heavy quarter inside a company that grew revenue 55%, turned operating cash flow positive, and ended up with nearly $100 million of cash. So that is why I say this quarter separates accounting noise from an operating reality. Now, the stock-based compensation charge is a non-cash. It reflects a long-overdue equity compensation linked to several years, which we have been discussing with the market. Now, frankly, I would rather recognize the charge when our equity value is materially higher than issue it at distressed levels or punish the shareholders. Now, put it more simply, I would rather take the accounting medicine at around, let's say, $15 than hand out the company at $3. Now, this is not arrogance. This is arithmetic. The FX loss was painful. Nobody enjoys currency devaluation unless they have a very unusual weekend hobby. Now, but again, look actually what happened underneath that accounting line. We collected cash. What people seem to be missing is that we've collected cash. Our customers paid us. Egypt paid us. Milestones were achieved. All of our advance payment, let me repeat that again, all of our advance payment guarantees associated with the project now have been completed and for every single project stage were released. And the project moved into a final implementation, which means we're successful. When naysayers came out and said, you're not going to be able to deliver, we have now delivered. We're in the final stage of implementation. So, yes, the FX came in. The project progressed. The guarantees have been reduced. And that is the operating story. Now, let us talk about what Gorilla is becoming, which is what we are all excited about. When we spoke to the analysts previously, Gorilla was still largely being viewed as a security intelligence, network intelligence, smart city technology company. That business remains important. It is part of our DNA. It is who we are and who we were for the last 25 years. But the company is now moving into a much larger arena. AI infrastructure, GPU infrastructure, data centers, sovereign compute, and secure national digital platform. The transition costs money. before it produces its full return. We're hiring people. We're buying hardware. We're securing land. We're progressing with power. We're taking co-location capacity. I think most of you have seen that press release come out in the last couple of days. We're investing in GPUs, networking, storage, cabling, security infrastructure, operational systems. Now, we could have managed the quarter for optics. We chose to manage the business for scale. The easy thing would have been to protect, in short term, the EPS, make sure that the right thing is to build the company. But that is most important for us, to build this company. Now, personally, I do not believe PowerPoints run GPUs. Headlines do not cool data halls. And definitely, hope does not secure power for us. Most importantly, execution does. That is what we are doing. In India, we have signed contracts with IOTA and materially expanded our AI infrastructure collaboration. That program supports major infrastructure deployment and gives us credible foundation for significant revenue scale. And when I speak about Gorilla becoming a $500 million revenue business next year, I am not throwing darts at a wall after a long lunch. I'm not drunk on my wine. I am looking at a signed demand, contracted opportunity, and infrastructure required to deliver it. Since then, people will say, Jay, you're being aggressive. Fine. But I call it ambition with a calculator. Now, in Thailand, for example, we're advancing with our 200 megawatt AI data center campus in Korat. We have secured and acquired the strategic land. We have secured the foundation of the power planning. We are building the physical platform for Gorilla's AI infrastructure. But more importantly, it is an owned AI infrastructure strategy in Asia. Thailand is not just a concept. It's not just a mood board. It's land power, planning, water, dark fiber, cooling, security, a real development path. Anyone can say there are very few who can assemble the infrastructure required to power it. We're also pursuing additional opportunities across Thailand, including Rayong. In Indonesia, I think the last couple of years you've seen, we have moved forward securing co-location facilities in Jakarta and in Bataan. Now, across Southeast Asia, our goal is to combine own data centers, co-location technology, GPU deployments, and sovereign AI demand into one regional infrastructure platform. Personally, as GA, I believe Gorilla has a credible path towards approximately over 500 megawatts of AI infrastructure capacity by the end of 2028. I'm not talking five years. If we execute properly, I can even go more. The demand is well north of a couple of gigawatts today. So we need to execute across Korat, whether it's Rayong, whether it's Bangkok, whether it's Jakarta, Batam, Singapore, Malaysia, Philippines, and other regional opportunities. Now, half a gigawatt of potential air infrastructure is not normal for a company of our current size. I've heard that that before. Many have told me, oh, you're too small. How are you going to build it? That is why this opportunity is actually so significant for a company of our size. And here is the most important point. We're not becoming a one-dimensional data center company. We have not stopped products. Raj, our group CTO, he continues to develop platforms. He continues to deepen our security intelligence capabilities. He's continuing to expand the network intelligence portfolio and push our sovereign infrastructure technology roadmap forward. In Taiwan, we continue to pursue new customer opportunities. With Chalpis, for example, as you've seen a couple of weeks ago, we're advancing our quantum safety. With Astrakos in India, we're strengthening our intelligence layer that helps protect and optimize infrastructure across cooling, IT load, and physical systems. That matters because The future of AI infrastructure will not be judged by how many GPUs I own I can point to. It will be judged on whether the infrastructure is secure, resilient, sovereign, efficient, and more importantly, and most importantly, trusted. Now, compute without control, for me, is just expensive heat. Now, Gorilla's advantage is that we are building the infrastructure layer and the intelligence layer together. We are also investing very heavily into people. A lot of people questioned this last year. And now I can tell you, over the last several months, we have added more than 100 plus employees and over 200 plus contractors across delivery, engineering, finance, compliance, operations, commercial functions, procurement, and so on and so forth. That is not overhead for the sake of overhead. That's execution muscle. No one, and personally, Gorilla, cannot deliver multi-billion dollar scale with a village hall committee and a lucky spreadsheet. No, that does not work. We're building the organization required for the next phase. So when you look at Q1, do not look at it as small quarterly miss against an old model. Look at it from the first visible quarter of a company that is going to be much larger and is being built. The old gorilla was about proving that we could turn around. The new gorilla is about proving we can scale. We are raising our full year 2026 guidance to 160 to 200 million. And I am personally focused on what it takes to build a profitable 500 million revenue business next year. That will require execution. It will require discipline. It will require capital. It will require delivery. And more importantly, it will require us to keep pushing across all of the markets in Middle East and Asia, along with other strategic locations. But the direction is very, very, very clear. Revenue is growing. Our customers are paying. I'm going to repeat that. Our customers are paying. Operating cash flow is positive. Cash is strong. We are securing land. We're securing capacity. We're buying hardware. building data centers, we're developing new products, we're investing in people, we're building the capital platform to fund larger projects. That is not hype. That's not Jay spinning some BS. That's execution. And frankly, in an AI market, whether there are too many companies selling dreams before breakfast and explanations by dinner, personally, execution is becoming rather refreshing. So my message to the market is very simple. Gorillas no longer exist. proving that it survived. Gorilla is proving that it can build something far larger and bigger. The market can debate my narrative. Markets can enjoy the debate. It gives people something to do between the spreadsheets. But the cash flow statement has already started speaking. So thank you. I will hand this over to Bruce, who will now walk you through the numbers in a way that accountants enjoy and not people tolerate. Bruce?

Thank you for that. I think Jay covered all of the highlights. I just wanted to zero in on a few of those highlights and then a few other numbers that stood out to me. So the first is, as Jay mentioned, revenue up 55% year on year. You can see from the full year guidance, you know, 160 to 200 is the range compared to last year. So it shows we're already on track with our year over year forecast. The other thing is that that revenue is converting into operating cash flow. So we collected invoices from three large customers in the first quarter. So that meant that overall net cash was 6.6 million. Subsequent to this quarter, we also got a release of all of the guarantees for our major project in Egypt. So basically the free cash portion of the balance sheet is very strong. And the restricted cash, which a year ago was a very large number, has come down to almost zero. At the end of the quarter, we are 98.4 million of cash and cash equivalents. That shows, I think, that we have a fortress-like balance sheet, which is able to tackle the projects that we have enumerated. So in between... you know, the and then the expansion into the co-location facilities and then the , et cetera. This is what gets us through the first stages. We also, the debt position continues to perform in the sense that it's continuing to dwindle. So we have 13.2 million in debt, so that leaves us with a very strong net cash position. And then the last thing I would say is when you look at the top line and the operating cash flow, obviously the results we're very excited about, but also we have invested, but a lot of this is operating leverage in the sense that the operating expense line, so in the financial results, it shows up as other operating expenses. That's basically the SG&A bill. It was only up 16% year on year. And that's because Some of the major hires we made last year, some of the major steps up in the budget we made last year. So we're actually seeing those investments pay off, and then I think the second round of investments that we're making now into building out the infrastructure offering will soon pay off in a similar fashion. And then the last thing I want to talk about was really – So Jay mentioned some of the numbers about the FX losses and then the stock-based compensation. So there was a $1.1 million operating loss without those two big revaluations. I would note that basically we carry large balances in three currencies, apart from US dollars, obviously, in Taiwan dollars, in Thai baht, and in EGP. Given geopolitical events in the first quarter, all of those had adverse movements. Taiwan, Egypt, and Thailand have all stabilized with currencies, so we shouldn't see a repeat of that magnitude. And second is some of those exchange rate losses actually showed up in the operating figures because they had to do with the movement in the receivables value. So that, I think, masks the underlying profitability of the business. So in a stable exchange rate environment, what I'm saying is we should revert, one without significant geopolitical upheaval, we should revert to a much more positive net income profile. And then in terms of many people have asked us over the last couple of months, okay, you have all these projects, you've announced that you're going for project financing, what is the update? Without Going into too much detail, which I think lenders would not like me to do, is we are very happy with the progress. We have multiple term sheets that we have either received and are waiting to sign and go into the documentation phase, or we are in the documentation phase already. And then the next announcement about the project level financing will be one where we basically say it's closed, and this is the daily basis project for the various projects that would be funded. So that is my update on the project financing, but we're very happy with how it's progressing, and it's comparing well with the assumptions that we had when we went in and signed the projects, you know, so the profitability is there. That's all for me. I'll turn it back over to Jay, and you can open up for questions.