Gorilla Technology Group Inc.

Thank you for standing by. This is the conference operator. Welcome to the Guerrilla Technology Group Inc., NASDAQ-GUR financial results conference call. As a reminder, all participants are in the 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 conference call, you may signal an operator by pressing star and zero. Before we begin, we would like to read the forward-looking statements. 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 a discussion of important factors that could affect guerrilla's results, Please refer to our filings with the SEC, including the most recent annual report on Form 20-S. Except as required by law, Guerrilla 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 Chandan, Chairman and Chief Executive Officer, and Bruce Bower, Chief Financial Officer. Please go ahead.

Thank you very much. Good afternoon, everyone, and thank you for joining us.

Now, the first half of 2026 marks, for me, a very decisive step forward for Guerrero. The revenue increased 99%, nearly 100% year-on-year, to about $78.4 million, effectively doubling in the first 12 months. But more importantly, the momentum strengthened as the half progressed. Now Q2 revenues reached well over $50.1 million, which was a net increase of roughly 78% from Q1 and 138% from Q2 last year. Now we had originally expected, as we had promised to the market, about $33 million, which we upgraded to $44 million. We've exceeded that by another $6.1 million to nearly by 14%, which principally means that all the deliverables and certain milestones were completed earlier than anticipated. Personally, that's what execution looks like. Now, the challenge we've also had is that the operating performance and progression at the same time were also equally significant. Our reported operating loss narrowed from $41.1 million in Q1 to approximately $2.2 million in Q2, which was a reduction of 95%. A substantial part of the first quarter result was share-based compensation that has already been recognized. And more than 80% of the H1 share-based compensation was absorbed in the Q1 itself. And the quarterly charge declined by approximately what, about 78% in Q2. In plain simple English, Q1 carried the overwhelming majority of the burden. Q2 showed much clearer picture of the operating momentum we needed. Now, our cash efficiency also improved considerably. Whilst the revenue increased by approximately 100%, operating cash consumption declined by approximately 65%. From $4.5 million in H1 of 2025 to $4.3 million in page one of 2026. Operating cash usage also fell from 31.8% of the revenue to just 5.5%. Now, these are very materially important numbers which we need to take into consideration. Now, the company also recorded an overall increase in cash of approximately, what, 79.8 million during the first half, principally reflecting financing support and the expansion program together with customer collection. So we ended June with roughly around 179.4 million in cash, approximately 82% of our Q1 closing balance. That capital is not just sitting here politely in a bank and trying to get some interest rate. It is there to be deployed. What we are doing is that we are purchasing infrastructure, securing capacity, preparing sites, building teams, and funding the deposits and working capital required to deliver projects and many more. At the same time, we also understand that the cash balances will move between the reporting periods. Investors should distinguish between cash being consumed by underperforming operations and capital being deliberately deployed into contracted projects and revenue generating infrastructure. They're not remotely the same thing. However, convenient it may be for some people to pretend otherwise. Now, this investment phase also explains the current gross margin profile as well. Now, our gross margin had been reflecting a revenue mix weighted towards hardware, initial deployment, and project mobilization. What I need to make sure is that Gorilla also deployed more than 14.1 million into property and equipment currently That number is 29.4 million. We are also building the installed base first. As the infrastructure is commissioned, customer workloads migrate, utilization increases, and we expect the revenue mix to broaden towards compute, monitoring, managed services, and all other associated service. Hardware, personally, guys, does not begin producing its full financial results the moment it leaves the factory. It must be delivered It has to be installed. It has to be powered. It has to be tested. It has to be accepted by the customer. And more importantly, then the utilization happens. More importantly, we want to make sure that we are moving very, very quickly. Now, in terms of updates, I think Mark has been asking me for updates for a long time. For IOTA Phase 1, for example, the testing has been completed. The equipment deliveries are underway, and deployment has commenced. Testing will commence by the end of this week, early next week. Yota Phase 2, the equipment is currently being manufactured with completion expected over the next 25 to 30 days. In Indonesia and Batam, we're working very closely with our OEM and infrastructure partners. We have, as everybody knows, secure substantial data center space, and we're targeting approximately another 200 megawatts of capacity with an initial ready for service in the middle of 2027. and the broader deployment expected to be in the second half of 2027. At Korat in Thailand, the land has been cleared. We're advancing with the financing, the GPU procurement, the infrastructure requirements, while engaging the prospective off-takers with the objective of moving into a discussion into firm customer context. Now, to be absolutely clear, megawatts are not just capacity, they're not just capacity, they're revenue. More importantly, the capacity must be commissioned, It has to be contracted. It has to be utilized. Now, our accountants remain very stubbornly unwilling to accept the electricity of the payments, so unfortunately, we have to make sure that the customers pay us at any given point of time. Alongside these major infrastructure programs, our established security and network intelligence operations remain an important part of Gorilla. They provide not just the customer relationships, they also provide a better delivery experience, cash collections that support our broader expansion. Now, for people thinking that we're pivoting, we're not. We're not abandoning the business that brought us here. We are using it as a platform to build something substantially larger. Now for Q3, we're planning revenues between 48 to $15 million compared to the previous plan of 36 to 40 million. That represents a significant jump about 20 to 39% than the earlier planning range. For Q4, Our operating plan is revenues exceeding well over 60 to 70 million dollars, taken together with the H1 revenue of 78.4 million. Our revenue outlook for 2026 now stands at at least 200 million dollars, which is up from the 137 to 200 million range we provided at the beginning of this year. Now reaching the upper end requires additional execution, including further deliveries Customer and Virtual Activation. We intend to earn the upper end. I want to make sure that we're not simply announcing this, but we want to make it, you know, more and more useful as we go through the quarters. Now, looking further ahead into 2027, we're targeting revenues of about $450 million to $500 million. Now, that's an ambitious target that represents a quarterly revenue. of roughly $112 to $125 million. Now, we're not expecting the calendar to produce the growth for us. The target depends on all of the capacity that's being installed now, the commissioning of the additional projects, the conversion of the prospective demand into contracts, and the migration of utilization of the customer workloads. Now, there has been no shortage of personally embarking from the sidelines. Unfortunately, that does not deliver GPUs for us, and neither does it commission data centers or collect dollars from our customers. Our answer to all this will be execution. Now, Gorillaz entered the second half with substantially greater revenue scale, dramatically improved quarterly performance, stronger liquidity, and a growing portfolio of major international projects. We have more work to do. We are maintaining absolute delivery discipline. We're managing capital very carefully. We're improving utilization. converting opportunity into recognized revenue. And make no mistake, the direction of the travel now is unmistakable. So we're no longer explaining what Gorilla intends to become. We're beginning to demonstrate it. Thank you very much. Bruce, over to you.