Else Nutrition Holdings Inc.

Greetings and welcome to Altogen Technologies' fourth quarter and fiscal year 2025 results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Gary Stone, CFO at Altogen Technologies. Gary, you may begin.

Thank you, Paul. Good afternoon, everyone, and welcome to Altogen Technologies earnings call for the fourth quarter, fiscal 2025. Joining me on the call today is Jerry Fleming, President and Chief Executive Officer, Joe Hamblin, Chief Digital and Transformation Officer, and I'm Gary Stone, Chief Financial Officer. Earlier today, we issued an earnings release reporting financial results for the period ended September 30th, 2025. This release can be found on our IR website at www.altagen.com. We have also arranged a replay of this call, which may be accessed by phone. This replay will be available approximately one hour after this call's completion and remain in effect for 90 days. The call can also be accessed from the investor relations section of our website. Before we begin our formal remarks, we need to remind everyone that today's call may contain forward-looking information regarding future events, and the future financial performance of the company. We wish to caution you that such expectations and or beliefs are just predictions, and actual results may differ materially due to certain risks and uncertainties that pertain to our business. We refer to the financial disclosures filed periodically by the company with the OTCQB over the countermarket, specifically the company's Audited annual report for the fiscal year ended September 30, 2024, and the most recent unaudited quarterly report for the quarter ending June 30, 2025, as well as the Safe Harbor statement in the press release the company issued today. We do expect our audited financial report for fiscal year 25 to be filed by the end of this month. These documents contain important risk factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements. Altagen assumes no obligation to revise any forward-looking information contained in today's call. In addition, during today's call, we will also be referring to certain non-GAAP financial measures, such as adjusted EBITDA. These non-GAAP measures are not superior to or a replacement for the comparable gap measures, but we believe these measures help investors gain a more complete and understanding of our results. With that, I'll turn the call over to Altigen's CEO, Jerry Fleming, for opening remarks. Jerry?

Thank you, Gary, and good afternoon, everyone. Thanks for joining us on today's call. I'll begin today with an overview of Altigen's performance and strategic progress during fiscal year 2025. Following my remarks, Joe Hamblin will provide additional insights into our operating execution, after which Gary will return to review our financial results for the fourth quarter and the full fiscal year. Earlier today, we reported our fiscal fourth quarter and full year fiscal 2025 results. I'm pleased to share that we have delivered our sixth consecutive profitable quarter, culminating in full year profitability for fiscal 2025, which we view as a meaningful milestone for that underscores the progress of our business transformation. For the fourth quarter, revenue totaled $3.5 million with net income of $254,000. Looking at full year performance, fiscal 2025 revenue was $13.9 million, representing a 2% increase over fiscal 2024. While cloud revenue declined modestly by 3%, this was more than offset by the 15% growth in our services business, which was driven by higher consulting revenues and increased deployment services revenue related to our new cloud solutions. Compared to the fiscal year 2024, net income before taxes increased by more than $1.3 million year over year, resulting in earnings of 3 cents per share for fiscal 2025. Our long-term objective remains clear to build shareholder value by protecting and extending the lifetime value of our customer base through modern cloud solutions while accelerating growth through AI-enabled solutions and services. I'll now review our progress against this objective, beginning with the actions we've taken to modernize our cloud solutions portfolio. As we previously communicated, we experienced some revenue pressure as a result of the declining competitive position of certain legacy PBX and contact center offerings. This trend was anticipated and understood, and we proactively initiated a comprehensive effort to transition away from those platforms in favor of more scalable, future-ready modern technologies. Over some period of time, we conducted a thorough evaluation of all available alternatives, carefully assessing multiple technology providers against our criteria, including performance, scalability, cost structure, and long-term strategic alignment. These efforts culminated in the introduction of all new best-in-class white-label UCaaS and CCaaS solutions during fiscal 2025. Our technology platforms have been validated, in our opinion, through the early market traction and growing customer momentum since their launch earlier this year, reinforcing our confidence that these investments position Altogen very well for improved competitiveness and long-term value creation. Specifically, for our core engaged teams contact center, which we essentially launched right about this time last year, we deployed six customers representing 240 agents during the year with billing for those customers commencing at various points throughout the fiscal year. We've since contracted with an additional five customers representing another 230 agents which will begin contributing revenue upon completion of their respective deployments. Combined, these 11 customers represent 470 agents, and we expect them to generate approximately $75,000 a month in recurring revenue. For our MaxCloud UC business, we migrated approximately 60 customers representing 1,600 users from our legacy MaxCS cloud platform during fiscal 2025. We've since contracted An additional 50 customers representing about 1,400 users that will commence billing once their deployments have been completed. In addition, we have another 100 customers representing about 2,500 users on our legacy MaxCloud platform that we plan to migrate to the MaxCloud UC platform over the next six months or so. Now, these migrations do not immediately increase revenue. since these customers are already on a monthly cloud recurring revenue plan. However, we do expect the benefits of these migrations to include a significant extension of the customer's lifetime value to materially reduce churn and to lower our long-term support costs. Looking ahead, we'll also be targeting the several hundred remaining MaxVS on-premises customers, which represents about 4,000 users, in an effort to convert them to MaxCloud UC. As we convert these on-premises customers that are lower revenue customers to MaxCloud UC, we do expect to see new monthly incremental revenues. Our ability to enhance our solutions portfolio with the new MaxCloud UC and core engaged platforms is a direct reflection of the build versus buy strategy that we've adopted. In other words, we build solutions where we can deliver differentiated intellectual property most notably in AI-powered applications. Conversely, in highly competitive categories such as UCaaS and CCaaS, we believe value is best created through white-label partnerships and or selective acquisitions rather than duplicating commoditized platforms. This approach has been instrumental in reducing our operating expenses while transitioning our fixed development costs to a more scalable variable cost model. It's also enabled us to reallocate capital we were previously spending on development resources toward the development of new, innovative AI-powered solutions. Turning to our strategic partnership with Fiserv, we are continuing to advance multiple new initiatives, including a next-generation AI-powered cloud IVR solution, an AI-enabled customer experience analytics platform, and now our core engaged contact center service, Contact Center as a service platform. These solutions, as a reminder, are all brought to market by Fiserv under the Fiserv brand. As such, Altogen is not in control of the product launch timelines. Instead, our responsibility is to develop the solutions, work with Fiserv to get them certified under the Fiserv brand, and to support the Fiserv sales effort once those products are launched. With a $20 billion company like Fiserv, it takes time to get the necessary approvals and associate sign-offs completed. However, the wait will be worth it in the end as we continue to progress toward product launch. Moving to our Consulting Services Division, we continue to expand our relationship with the Connecticut Department of Transportation, which includes the addition of new AI-focused initiatives. The engagements with CTDOT not only contribute to near-term revenue, but also generate valuable domain expertise that directly helps our software-based AI solutions. The knowledge we continue to gain from AI projects on the consulting side is fully transferable to the AI solutions on the software side of our business. Now, the AI market, as many of you know, is literally flooded with vendors, most of them focusing on building next-generation AI platforms. Our unique approach is that we don't build the AI platforms. We build business solutions that utilize those platforms. Keep in mind, our typical target midsize enterprise customer does not have deep AI expertise on staff to build their own AI solutions. So our model is to provide that expertise in the form of packaged AI solutions and services, which allows those customers to deploy Altogen AI solutions without the need to invest in expensive technical resources. By all accounts, this is the model preferred by midsize organizations. I'll leave you with this thought. Our business transformation efforts are beginning to show results. We've significantly top-graded our technical talent, we've streamlined our internal business systems, we've reduced our operating expenses, and we've introduced all new leading-edge UCaaS and CCaaS solutions. We believe these efforts position Altogen to drive sustainable profitability, improve customer retention, and long-term customer value.