Xtract One Technologies Inc.

Good day, and welcome to the Extract One Technologies Fiscal 2026 Third Quarter Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. To withdraw the question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Witte, Investor Relations Advisor. Please go ahead.

Good morning, everyone, and welcome to Extract One's fiscal 2026 third quarter conference call. Joining me today is the company's CEO and director, Peter Evans, and CFO, Karen Hirsch. Today's earnings call will include a discussion about the state of the business, financial results, and some of Extract One's recent milestones, followed by a Q&A session. This call is being recorded and will be available on the company's website for replay purposes. Please see the presentation online that accompanies today's discussion. Before we begin, I would like to note that all dollars are Canadian unless otherwise specified and provide a brief disclaimer statement as shown on slide two. Today's call contains supplementary financial measures, including the addition of adjusted EBITDA this quarter. These measures do not have standardized meetings and guidance prescribed under IFRS. and therefore may not be comparable to similar measures presented by other reporting issuers. These supplementary financial measures are defined within the company's filed management discussion and analysis. A reconciliation for adjusted EBITDA was included in yesterday's press release, as well as in the back of this morning's earnings presentation. Today's call may contain forward-looking statements that are subject to risks and uncertainties, which could cause actual results, performance, or developments to differ materially from those contained in the statements and are not guarantees of future performance of the company. No assurance can be given that any of the events anticipated by the forward-looking statements will prove to have been correct. Also, some risks and uncertainties may be out of the control of the company. Today's call should be reviewed along with the company's consolidated financial statements, management's discussion and analysis, and earnings press release issued June 10, 2026, available on the company's website and its CEDAR Plus profile. And now it is my pleasure to introduce Peter Evans, Chief Executive Officer of Extract One. Peter?

Well, good morning and thank you, Chris. And as always, welcome to all of our investors, our analysts, and others that are joining us today. Let's start by turning to slide number four. It's a pleasure to begin today's call on a high note. It's a wonderful day to start a Thursday. Our performance this quarter was outstanding. And, you know, as I look at that outstanding performance, it's a reflection of what we've been building as a business coming together to at the right time. Extract One posted record revenues of $10.3 million, almost triple of what we did in the third quarter fiscal 2025, which to me is just unbelievable. We also achieved for the first time in the company's history a positive adjusted EBITDA with minor adjustments. And perhaps most importantly, we're continuing to experience an increase in demand across all of our product lines, while concurrently we've expanded our product capabilities to expedite the pace of installments and drive margin expansion. Happy advocates. And not customers, our advocates, though, that is the most exciting thing to me and makes me most happy about what we've done in this past quarter. This position that we've put ourselves in sets us up very well to continually increase our revenue base and particularly our recurring revenues as we hit and continue to deliver cash flow breakeven in the future. As previously committed to our investors, I'm extremely pleased with how successfully our team has risen to the task of cost-effectively scaling up our business operations and while at the same time satisfying our customers as well as our shareholders. As mentioned earlier, we focus on advocates, not customers. Advocates are our business, and that continues throughout this quarter and every other quarter that we've delivered so far. Stated another way from our business, we are directionally well-positioned based on positive key financial outcomes for Q3, being strong revenue growth year over year, continued margin expansion sequentially year over year, while judiciously continuing to manage our OpEx growth with a very scalable business model. I previously discussed that the business objectives is to deliver a predictable, high growth, high profit business model that is built for scale. And this quarter has shown everything coming together that we've invested in the business and delivering upon that. Our backlog remains strong as just over $45 million, providing continued confidence in the outlook for the remainder of fiscal 2026 and beyond. Our deployments during the quarter were roughly evenly split between our two products, illustrating what we've previously said, that our smart gateway and extract one gateway products are very complementary and uniquely serve unique market segments, each which has critical capabilities required for those markets. Our objective is to continue to be the innovation leader and deliver those must-have features that are unique to each market, and that makes us the default choice for each of those markets. Smart Gateway continues to increase its market penetration, particularly across healthcare and entertainment segments, while the Extract One Gateway orders have been accelerating in places like schools, offices, buildings, and other segments, as both product lines are gaining traction in their respective target markets. Now, let's talk a little bit further about the Extract One Gateway, as shown in slide number five. Last quarter, I discussed and promised that we would continue to expand our production capabilities and wrap up our manufacturing and deliveries for the extract one gateway, converting the strong backlog to revenue, and more importantly, converting that backlog to delighted customer advocates. I'm very happy to report that we've achieved these outcomes with a record number of customer installations occurring in this quarter. As stated in the past, the main hurdle to more rapid deployments of our systems to converting that backlog into revenue has been acceleration of the production process. The initial demand for the Extract One Gateway far exceeded our projections for the first year of deployment for a new product introduction. This is a great problem to have and one I'd welcome any day. By working closely with our suppliers, we've significantly increased our manufacturing capabilities and, in tandem, the pace of installations. And I'm very pleased that we have in place the operations model to address future projected demand at a much higher level than we originally forecasted. While deployments are certainly still dependent on customers being ready to take delivery or oftentimes delivering in a phased manner, given their own unique security and operating parameters, our enhanced production capacity has resulted in more efficient delivery and deployment of units, reducing our time to market and the cost of delivery of the systems. The market response for this product has been tremendous as customers are not only pleased with X-Rack 1 Gateway's advanced capabilities, but also our ability to fast track their delivery and installation timelines. This is particularly helpful as we move into the busy summer months when schools are looking to deploy security solutions or upgrade their existing security solutions. It's also very satisfying that customers using the Gateway have become very, very strong promoters, advocates, and references to other companies, as recently demonstrated in a school security safety conference when one of our customers was expanding upon the outcomes that they have seen in their schools. We're very pleased with how those customers are looking for new solutions or to replace existing solutions and finding the One Gateway a perfect fit for their needs. During the quarter, our X-TRACK One Gateway accounted for almost half of all year-to-date bookings, which is quite impressive given that we started our commercial rollout of this fresh new product just a few quarters ago. Thus, it's a clear testament to our ability to deliver unique, technology-driven innovation solutions to a market that addresses customers' defined priorities. versus force-fitting customers with multi-box products. We see a strong upside demand for the gateway given its broad applications across our target industries and schools, particularly when a system is needed to detect threats in an environment where individuals are carrying numerous electronic devices and without disrupting their experience and crowd flow. Some customers are reporting an ingress pace of almost 66 people operating with this solution or about 4,000 people for a single lane system with single digit alert rates in these complex operational environments. We believe our product is best in class and is driven by customer defined innovation with increasing number of clients. More clients are requesting demonstrations and installations and I'm proud of how our team has stepped up to the challenge in meeting demand and ensuring excellent customer satisfaction. This is what led us to win recent contracts, such as the couple that we've announced with Granville County Schools in North Carolina, Morgan County Schools in Alabama, just to name a few, along with many financial institutions, major manufacturing companies, and others. We now have over $110 million USD in our qualified sales pipeline across both of the product lines, with opportunities approximately evenly split between the two solutions, the smart gateway and the one gateway. and these opportunities are moving through the sales funnel. As we approach the end of fiscal 2026, we remain optimistic about our growth trajectory, and we're sitting at the fulcrum point of profitability. Our backlog expansion is expected to continue, as should our revenue growth, setting us up for a very strong fiscal 2027 and beyond. The company is not only on track for its best year ever, But it's also built a solid foundation to continue to accelerate that trajectory for top line, for gross margin, and for increasing profitability next year and years after. The summary to me is we've done what we set out to do, designed the most innovative, effective weapons detection technology, increased our production capabilities, and executed it on our business model in a way that will continuously improve results and increase returns to our investors. I'm very, very proud of how far we've come, and I look forward to the future and what the next quarters and years will bring. Once again, I'd like to thank our employees for their unbelievable passion and dedication to what we do, the focus on creating advocates, and thank our investors for their continued patience and interest as we get to this fulcrum point for the business. Our customers who choose excellence have also been someone that I've been very pleased to work with. They look for great outcomes for their patrons, for their students, and for the employees as a priority, and that's the company that we've made as a powerhouse that we know it now to be. Right now, I'm going to turn it over to Karen to provide more detailed discussion of the actual financial results, and then we'll take questions. Karen?