VCI Global Limited

Good morning everyone, and welcome to VCI Global's first half earnings conference call. Joining me today to discuss our results are Victor Hu, our Group Executive Chairman and CEO, and Zifeng Ang, our CFO. Before we begin, I would like to take this opportunity to remind you that our remarks today may contain forward-looking statements which are subject to future events and uncertainties. Statements that are not historical facts, including but not limited to statements about the company's beliefs and expectations are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and our actual results might differ materially from these forward-looking statements. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors, including in our foulings risk SES. This presentation also includes certain non-GAAP financial measures, which we believe can be helpful in evaluating our performance. However, those measures should not be considered substitutes for the comparable GAAP measures. The accompanying conciliation information related to those non-GAAP and GAAP measures can be found in our earnings press release issued earlier today. Without further ado, I will now turn the call over to our Group Executive Chairman and CEO, Mr. Victor Hu.

Thank you and good morning everyone. The first half of 2035 has been a pivotal period for VCI Global. We are not building just one platform, but a portfolio of high-growth verticals across cybersecurity, AI, fintech technology development, and AI infrastructure. Each of these is designed to stand on its own as a strong business while working together to serve a growing base of enterprise and institutional clients. Our technology segment has taken the lead this year, delivering $9.3 million in the first half, up from $1.7 million a year ago. This marked a clear structural shift in the business, with technology now driving most of our growth. At the same time, our consultancy arm remains a solid foundation, contributing $8.1 million, even as activity levels mobilized after an exceptional 2024. Together, this gives us a balanced model of fast scaling technology engine supported by stable consultancy cash flow. We are also opening up new revenue streams. One key milestone ahead is the launch of our GPU Lounge and GPU Cloud platform, expanding into GPU as a service. Our RWA consultancy is gaining traction, and we are increasing investment in cybersecurity, AI, data analytics and fintech. These are areas with long-term potential and strong alignment with our strategy. In parallel, we are in advanced discussion on a digital asset treasury strategy, which we believe will complement our ecosystem and create additional growth opportunities. Another milestone on the horizon is the planned IPO of VCCG. Our capital market advisory arm targeted for the first quarter of 2026. which reflects how each vertical from advisory to technology can evolve into a self-sustaining growth engine within the VCIG ecosystem, giving a strategic flexibility and opportunities to unlock value. Overall, revenue grew 37% year-on-year to $18.7 million, with strong momentum in technology. EBITDA was $5.2 million, supported by top-line growth and disciplined execution. Looking ahead, our focus is clear, execution and scaling. We are bringing our GPU and AI infrastructure services to market, growing our cybersecurity offerings, and maintaining healthy deal flow in our capital markets advisory business. We are building VCI Global as an ecosystem of platforms, each with clear commercial value and long-term potential. I'm encouraged by the progress so far and focus on what's ahead. With that, I'll hand it over to Ang to walk through the financial performance in more detail.

Thank you, Victor. Hello, I'm Ang, CFO of DCIG, and let me walk you through our financial performance for the first half of 2025, covering the six months ended June 30. We reported total revenue of $18.7 million representing a 37% increase from the prior year period. Gross profit increased by 17% to $15.1 million with gross margin maintained at 80%, supported by a disciplined cost structure and operating leverage inherent in our model. EBITDA was $5.2 million reflecting both top-line growth and continued investment across our strategic initiatives. Net profit after tax was $4.66 million with a net margin of 25%, demonstrating the resilience of our earnings profile as we scale new verticals. Outside of the core business, interest income increased to $1.3 million compared to $0.7 million a year ago, driven by a larger loan receivable tax and client financing activities. This remains a high-quality earning stream that complements our core operations. Other services contributed $43,000 compared to $140,000 last year, while other income increased to $0.6 million from $0.1 million primary from financial assets and ancillary gains. Taken together, the first half result reflects a scalable margin a creative model underpinned by diversified revenue stream and disciplined capital deployment. As we move into the second half, our focus is on executions, converting strategy initiative into sustained earning growth and maintaining the financial recall that supports it. With that, I'll hand it back to the moderator.

Thank you, Mr. Ang. We would now like to begin the Q&A session as we receive a few questions from the floor during the conference. Our first question comes from the floor, addressed to Mr. Victor. You have been investing in AI, cybersecurity, fintech, and data analytics. How are you prioritizing capital allocation across these verticals, and what kind of returns or milestones are you targeting?

We are taking quite a disciplined and phased approach when it comes to capital allocation. Right now, our top priority is AI infrastructure and related services. This is where we see the clearest commercial demand. So investments around the AI-integrated server cloud platform and upcoming GPU launch and GPU cloud are at the forefront. The next area is cybersecurity, which complements our AI initiatives and positions us well with enterprise and institutional clients. For fintech and data analytics, we are being more selective. It's about finding the right partnerships. and making targeted investments rather than large upfront commitments. In terms of milestones, we are focused on commercial traction and revenue visibility within 12 to 24 months. We are not aiming for quick wins, but rather sustainable growth in areas that fit our platform.

Next question asks, consultancy revenue moderates year-over-year while technology surges. Should we view this as a structural shift toward technology as the main revenue driver going forward or more of a cyclical effect?

It's a bit of both. Consultancy had a very strong 2024, so part of the modulation is simply a return to more typical activity levels. The underlying business remains solid. At the same time, there's a structural shift underway, with technology becoming a larger part of the business. The growth we have seen in AI infrastructure and solution is real, and we expect this segment to continue driving growth. So, we see this as an evolution of the revenue mix, where technology plays a bigger role, while consultancy remains a stable and important foundation for the company.

Here's another question from the floor. How is your current pipeline shaping up for the second half of the year, particularly in the technology segment?

The pipeline for the second half looks steady and balanced across both segments. On the technology side, we are seeing consistent interest from enterprise clients in our AI-integrated server and cloud platform. A number of these discussions have moved into later stages, including some proof of concept work and early commercial talks. While it's still early, these engagements are progressing in line with our expectations. For GPU as a service, interest has been encouraging, particularly from local enterprises that are exploring more efficient ways to access compute resources. As we roll out the GPU Lounge and GPU Cloud platform in the coming months, we expect to onboard a small group of initial clients. This will help us validate the offering and fine-tune the operational model before we scale it more widely. On the consultancy side, the pipeline remains healthy, with a mix of mandates at various stages. We are working closely with clients preparing for US listings, and several are expected to hit filing or other key milestones in the second half, subject to market conditions. Overall, the visibility is reasonable, and we are taking a measured approach to execution. The pipeline supports our outlook for steady progress in both technology and consultancy for the rest of the year.

And our next question, as you scale both the technology and capital market businesses, What are the key execution risks you are watching most closely for the remaining of 2025?

There are a few areas we're keeping a close eye on. First is delivery capacity. As demand grows, especially on the technology side, it's important that we scale our infrastructure and teams in a controlled and sustainable way. Second is timing around consultancy deal projects, particularly IPOs, which can be influenced by external market conditions. We are managing this by keeping a diversified pipeline and working closely with clients. Third, capital deployment discipline remains key. We are sequencing investments carefully to match commercial milestones. Lastly, we continue to monitor regulatory developments, especially in AI and digital assets, to stay ahead of compliance requirements. Overall, these are manageable risks, and we feel we have the right structures in place to navigate them through the rest of the year.

Thank you. That wraps up all the questions we received from the floor. We have addressed all queries for today's session. I will now hand it back to our Group Executive Chairman and CEO, Mr. Victor Hu, for his closing remarks.

Before we end, I want to take a moment to reflect on the first half of 2025. It was a solid period for us, marked by healthy revenue growth, strong contributions from our technology segment, and continued stability in consultancy. We also make meaningful progress in laying the groundwork for our next phase of expansion. Looking ahead to the second half, our focus is on execution. It is about taking the plans we have set in motion and delivering them. We know where our priorities are and the team is aligned and moving forward steadily. We appreciate everyone taking the time to join us today and we are grateful for your continued support. We look forward to sharing our progress with you