Firy Inc. Class A

Good morning, everyone. I'd like to welcome you to the FURY Inc. Second Quarter 2026 results call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. At this time, I would like to turn the conference over to your host, Richard Land, from Alliance Advisors, to begin.

Good morning, everyone. FURY issued its 2026 second quarter earnings release yesterday after the market close, which is available on the company's investor relations website. Let me read the safe harbor language and then we'll get right into the call. All statements and comments made by management during this conference call, other than statements of historical fact, may be deemed forward looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Furey cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward-looking statements made during the call. For additional details on these risks and uncertainties, please see Furey's annual report on Form 10-K for the year ended December 31st, 2025, as followed with the Securities and Exchange Commission and Furey's subsequent public filings with the SEC. Fury undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Additionally, we will reference various non-GAAP financial measures and KPIs during this call. Please refer to our earnings release for an explanation of these measures and how we use them, and in the case of the non-GAAP financial measures, reconciliations to their nearest GAAP equivalents. With that, it's now my pleasure to turn the call over to FURY CEO, Andrew Paradise. Andrew, please go ahead.

Thank you, Richard, and good morning, everyone. Q2 was, without question, the most consequential period in the company's recent history. Our fairy rebrand is now fully in the market, the papaya verdict and judgment are in, and we're executing against our strategies to unlock value for our shareholders. Let me start with a review of our second quarter results. I'll then highlight three significant developments since our last call in May before moving into our operating businesses. For the second quarter, GAAP revenue was $31 million, up 6% quarter over quarter and up 23% year over year. Adjusted EBITDA loss excluding litigation-related expenses was $2.7 million, a $4.5 million improvement quarter over quarter on a normalized basis. Including litigation-related expenses, The adjusted EBITDA loss was $13.6 million compared to a loss of $12.8 million in the first quarter and $11.4 million in Q2 2025. We also have an update regarding our balance sheet. As announced on August 4th, we are redeeming $80 million in debt, saving the company approximately $2.8 million in interest expense before those notes maturity date. This leaves $50 million in debt outstanding. We're evaluating options that would further strengthen our capital structure and liquidity position. As part of our June rebrand to Fiori and establishment of a holding company structure, we refined how we present our results. Beginning with the second quarter, corporate operating expenses are reported separately. This gives investors a cleaner view of our businesses. This is a change in presentation only. It has no effect on our consolidated financial results, and we have recast prior periods on the same basis. Looking at our two operating segments, Razor exceeded $10 million in quarterly revenue for the first time, growing 6% quarter over quarter and 75% year over year. The second quarter was Razor's fourth consecutive quarter of profitability, with each quarter growing from the prior period. We expect Razor's profitability will continue to build through the back half of the year behind strong revenue momentum and operating leverage. For Skills, revenue increased modestly quarter over quarter. This included a net $1.5 million benefit from two one-time items. Excluding these adjustments, Skills revenue was down approximately 3% sequentially, consistent with the 8% decline in paying monthly active users. Moving on to recent key developments. First, I'd like to introduce our new CFO, Alex Walsh, who joins us on the call today. Alex officially joined the team on July 13, and he's hit the ground running. He brings an extensive track record of helping consumer-focused businesses accelerate top-line growth while driving profitability. I'm confident he'll replicate the success and contributions he delivered at his prior companies, Aristocrat Gaming, The Lego Group, and Procter & Gamble. Several of you have already had the chance to connect with him directly. As we transition from the turnaround into our growth phase, Alex will be front and center as we engage with Wall Street in this next chapter. I also want to thank Gaetano Franceschi, our former CFO, for the steady hand he provided throughout our turnaround and for the support he's shown in bringing Alex up to speed. The second significant update is our rebrand in June to Fury. Fury is the parent company together with its two reportable operating segments, Razor and Skills. Razor is our high growth AI powered performance advertising business, helping brands acquire and retain high value users. Skills is our real money, skill based gaming operation with more than 90 million registered users. and Beamable, which we acquired in the first quarter of this year, is reported within our skills business, is our developer backend and live ops infrastructure business. Beamable is building infrastructure technologies for the gaming industry with skills as a first customer and making progress on its objectives. The rebrand reflects the structure that's already existed for some time, interconnected businesses supported by shared corporate resources. Each of our businesses shares a customer, the game developer, and serves this customer at different points in their monetization journey. And more importantly, our three businesses share something rare, a compounding flywheel that operates in a way few other businesses could replicate. The third update concerns the recent court ruling and our litigation against Papaya Gaming. As you'll recall, in April, the unanimous jury in the U.S. District Court for the Southern District of New York found Papaya liable for false advertising. A few weeks ago, the presiding judge rejected all of Papaya's post-trial challenges and awarded us approximately $730 million. This is more than 70% above the original jury award and more than double the previous largest false advertising award in U.S. history. The natural question for shareholders is what happens next and specifically how we collect. Papaya is a private company, but public trial exhibits give the public access to their 2023 audited financials. Papaya earned $461 million in revenue and $73 million in net income and had $135 million in cash at the end of 2023. In Papaya's more recent filings with the Delaware court, Papaya CEO represented to the court that the company has achieved annual revenue of approximately $500 million per year, demonstrating the top line is on par with their 2023 financials. An appeal would go to the Second Circuit. Federal appellate courts affirm the majority of the civil judgments they review on the merits. We remain confident in the record and the judgment while recognizing that no appellate outcome is guaranteed. were pursuing every avenue available to us to return value to our shareholders. As Papaya's largest creditor, we intend to assert our rights in both the Israeli and U.S. proceedings. Looking back over the past few years to today at trial, the evidence showed that Papaya advertised billions of dollars in prize pools while using bots, and over 60% of prizes were never paid out. The jury found Papaya liable, and the court upheld those findings in full. Our team invented a category. Litigation is not our business. Building great products and services is. We took on these cases to defend our business and the category we created. BAPAI has now stated that it's no longer running bots. As our core US market returns to fair competition, we expect to benefit. A reminder on where the rest of our fair play litigation stands and where it goes from here. In our litigation with AVA Games, the 2024 jury verdict translated into a $80 million settlement, of which $15 million remains outstanding and two equal payments of $7.5 million over the next two years. Our case against Voodoo continues to move forward in the legal process. And on a separate note, the trial date in our litigation with Tether Studios has been moved to 2027. Let's turn to our operating strategy. Razor is demonstrating strong performance through product-led growth. Today, the platform processes more than 6 million queries per second across more than 10 billion devices. Razor's growth is coming from two areas, increasing existing clients' share of wallet and winning new logos outright. Razor's customers are performance-based. If Razor provides an efficient return for its customers, will capture a higher share of wallet. Additionally, we're offering our customers new, high-performing products. We offer five distinct products, Android retargeting and user acquisition, iOS retargeting and user acquisition, and connected television. We've built global operations, product, and sales teams with significant experience in this category. We see an opportunity to deepen existing customer relationships and to continue expanding beyond the core gaming market customer. Gaming remains Razer's largest advertiser category at approximately 70% of Q2 revenue. This is down from roughly 80% in the prior quarter, which we believe is a clear sign that diversifying into consumer, apps, retail, and entertainment is working. We expect Razor's revenue growth to nearly double year over year. The business has a significant structural advantage worth highlighting. We own and operate our own data servers. This enables Razor to run both retargeting and user acquisition at real scale. Our iOS products are still newer to the market and CTV just launched, so there's still a lot of untapped potential. as all of our products scale, the incremental cost to serve stays low, which is exactly the kind of operating leverage you want to see. Shifting to skills. The business experienced operational headwinds during the quarter. I've stepped in on an interim basis to lead the skills business while we actively recruit a dedicated skills platform CEO to support our growth efforts. We have line of sight to return the business to sequential growth in Q4. Our priorities for skills are aligned with long-term value creation, and we're committed to staying disciplined on costs and improving unit economics and customer lifetime value. Skills content is now a balance of owned and operated second-party and third-party titles. Games now operated and owned by skills account for 40% of Q2 GMV. Before I hand things over to Alex, I want to point you to the new investor presentation we posted to our IIR website as part of the June rebrand. It lays out in more detail how Fiori is positioned to benefit from combining AI-driven performance marketing with gaming. That combination underpins our expectation for revenue to more than double from 2025 to 2028, alongside a steady build in cash generation. We expect to generate modest, positive operating cash flow in 2027 and accelerate from there into 2028 and beyond. We see four clear drivers for this business, and by extension, shareholder value. First, Razor continues to scale with expanding margins and increasingly stands out. Razor's already EBITDA positive and scaling across iOS user acquisition, retargeting, CTV, and a broadening advertiser base. Second, we're confident that we have the right playbook to drive a return to growth at Skills. That path runs through our product, our content, and discipline unit economics. Third, our operating structure gives us the ability to scale the overall business without a proportional increase in fixed costs. And fourth, we expect litigation expenses to decrease. While litigation has been a real expense burden to date, we believe it will deliver a strong return on investment. and as it decreases, it will drive EBITDA and cashflow growth. I started the call by saying Q2 was the most consequential period in the company's recent history. What makes it pivotal is what comes next. The papaya judgment is in hand. The economics of the business are improving. We're entering a new phase for this portfolio. Fiori gives us a structure designed to compound value across the businesses we own today while creating optionality for where we go next. Over time, as we generate capital, we will allocate it to where we believe it can earn the highest returns. I founded this company in 2012 with a 100-year vision. The last few years slowed that work, but they didn't change the thesis. The business is improving, the structure is in place, and I believe this company's most interesting chapters are still ahead. With that, I'll turn the call over to our CFO, Alex Walsh, for a closer look at our second quarter results.