Calian Group Ltd.

Good day, everyone. Thank you for standing by. Welcome to Kellyanne Group third quarter 2025 earnings conference call. At this time, all participants are on the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host. Jennifer McCauley, Director of Investillation. Please go ahead.

Thank you, Olivia, and good morning, everyone. Thank you for joining us for Calion's Q3 2025 conference call. Presenting this morning are Kevin Ford, Chief Executive Officer, and Patrick Houston, Chief Financial Officer. They will present our increasing opportunities in defense and space, as well as financial highlights of our Q3 consolidated results. As noted on slide two, please be advised that certain information discussed today is forward-looking and subject to important risks and uncertainties. The results predicted in these statements may be materially different from actual results. As a reminder, all amounts are expressed in Canadian dollars, except as otherwise specified. With that, let me turn the call over to Kevin.

Thank you, Jennifer, and good morning, everyone. From my viewpoint, we had a mixed quarter. Despite ongoing headwinds in certain aspects of our ITCS business, we experienced significant positive developments. Notably, our defense business is thriving, with growth continuing at a robust double-digit rate. Additionally, we are witnessing a return to organic growth in the majority of our businesses. A testament to our progress is the substantial increase in our signed backlog. which grew by $640 million during the quarter. We also announced the arrival of Chris Pogue to lead our newly formed defense and space business unit as we look to capitalize on global tailwinds in the defense and space markets. Overall defense business, which now represents 50% of our revenues, continues to grow. In fact, trailing 12-month revenues reached $373 million, up from $330 million in fiscal 24. On a trailing 12-month basis, defense revenues are up 19%. Of this amount, 12% represents organic growth, as demand in Canada and Europe is ramping up for our mission-critical defense solutions, including healthcare, manufacturing, engineering, cyber, and military training. In Europe, there's strong momentum supported by a DIA pipeline exceeding $1 billion. Although we have secured several new contracts, we are unable to disclose the details of these contracts due to security sensitivities. This demand highlights the strategic impact of expanding our footprint in Europe with acquisitions such as Mabway and leveraging them to propel growth. With the promising developments anticipated in the coming year, we plan on making further investments in our European and UK operations, sales and marketing efforts to capitalize on the expanding market opportunities, and securing longer-term market share. In Canada, we're beginning to observe promising signs of momentum. We're actively engaging in discussions with Canadian Armed Forces and members of Parliament in an effort to become a strategic partner. The CanSec trade show in Ottawa this past May provided an excellent platform for us to showcase our strong range of solutions, significantly enhancing our brand presence in the marketplace. The recent $250 million defence health increase we announced is an early indicator of more opportunities on the horizon. With current discussions focusing on significantly increasing defense spending to 2% to 5% of GDP, alongside the bi-Canadian movement and the federal government's investment plans for the north, we are strategically positioned to capitalize on these favorable conditions. The timing for the initiation of the new defense contracts remains uncertain at the present. However, we anticipate gaining clear insights in our fourth quarter following the unveiling of the federal budget in the fall. This budget announcement is expected to provide information regarding the renewed defense plans, including aspects such as scale, implementation speed, and strategic priorities. By then, we should have a more comprehensive understanding of how these factors will influence our contract opportunities and timelines. Just a reminder that defense is not only air, ground, and sea, but increasingly space and cyber as well. The space and cyber industries are set to be a major growth driver in the future as investments increase. And we see promising opportunities for Cayenne in these areas. To maximize our potential in the global defense and space opportunity, we recently announced the merger of our advanced technologies and learning segments. The strategic move aims to harness the synergies between our communications and manufacturing solutions and our expertise in both the defense domain and specifically immersive training and simulation, thereby accelerating mission success for our defense and space clients. Chris Pogue will lead this new combined business. Chris is one of Canada's most accomplished leaders in defense and space innovation. He recently served as president and CEO of Talus Canada, where he expanded naval support services, re-established land force capabilities, and guided key AI and digital transformation initiatives. Prior to Talas, he led MDA's government defense portfolio and held leadership roles at General Dynamics Mission Systems Canada and CAE Professional Services. His track record gives him the vision and operational rigor to power Callion's next-generation defense and space capabilities. We're excited to welcome him on board, and we are confident in his ability to lead Callion into becoming a defense-leading OEM. On that note, let's turn to our Q3 results. As we stated last quarter, ITCS continues to face headwinds, but the majority of our business is growing. Our consolidated revenues were up 4%, reflecting a 10% decrease in the ITCS segment, which was offset by a robust growth of 9% in the rest of our business. Excluding ITCS, organic growth was 4%, demonstrating an improvement over the past few quarters. Adjusted EBITDA was down 5%, reflecting a significant downturn in the ITCS segment profitability, partially offset by 10% growth in the rest of our business. In Q3, ITCS continued to face headwinds from its cybersecurity platform transition to Microsoft and lower sales from its U.S. customers. In response, we have continued to implement strategic measures to optimize the business that will require time to translate these efforts into significant improvements in profitability. It's important to note, however, that the Canadian defense and government solutions business continues to meet expectations and provides a strong footprint to capitalize on the macro environment. Last week, Mike Tremblay, served as president of the ITS segment, announced his resignation from his role. We extend our gratitude to Mike for his contributions during his tenure at Calum, and we wish him success in future endeavors. In collaboration with the current team, we will be actively involved in developing a seamless transition plan leading up to its departure in early September. I'll ask our CITO, Mike Molnar, to work with the existing team as they continue to work diligently to reverse the current situation and regain momentum. Encouragingly, we are beginning to see positive indicators highlighted by several key wins that demonstrate our potential for recovery and growth. These key wins reflect the team's commitment and resilience We're optimistic about the path forward as we strive to achieve our strategic objectives and enhance our market position. As I mentioned, the rest of our business combined, our core space, defense, and health and other strategic growth areas footprint has demonstrated robust revenue in the adjusted EBITDA growth in the quarter, and we are committed to building on this momentum. Our recent contract signings and backlog figures highlight the positive trajectory of our business. This quarter, we achieved a significant milestone by securing over $640 million in contracts. A substantial portion of these contracts is attributed to the health segment, particularly through our AMS acquisition and the expanded HCPR contract, which together added close to half a billion dollars. Year-to-date, our contract signings have surpassed $1 billion, and our backlog stands at an impressive $1.5 billion, with two-thirds concentrated in the defense sector. I believe we are among a handful of companies in Canada with a defense backlog exceeding $1 billion, complemented by a strong national footprint, underscoring our strong position in this marketplace. On that note, I'll now ask Patrick to discuss Q3 consolidated results.