Avante Corp.

Good morning, everyone. We will be starting in one minute. Thank you everyone for joining us today and welcome to Avante's fiscal fourth quarter and year-end 2026 investor webinar covering the three months and 12 months ended March 31st, 2026. My name is Rajen Sohal and I will be the moderator for today's call. Joining me on the call today are Emmanuel Mounouchos, founder and CEO of Avante, and Raj Kapoor, the company CFO. This call is being recorded. There will be a question and answer session at the end of the call. I trust that everyone has received a copy of our financial results press release that was issued last week. Listeners are also encouraged to download a copy of our annual financial statements Please note, portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provisions of those laws, forward-looking statements that are based on management's current views and assumptions, and that this discussion is qualified in its entirety by the cautionary note regarding forward-looking statements that is appended to our news release. Please review our press release and Avante's reports filed on CDAR Plus for various factors that could cause actual results to differ materially from the projections. We use terms such as gross profit, gross margin, adjusted EBITDA, and RMR on this conference call, which are non-IFRS and non-GAP measures. For information on how we define these terms, please refer to the definition set out in our management discussion and analysis. And with that, let me turn the call over to Mr. Emmanuel Mounouchos, founder and CEO.

Thank you, Rajan, and welcome everyone. We truly appreciate everyone joining us today. On today's call, our CFO, Raj Kapoor, will review fourth quarter and full year fiscal 2026 results. And I will provide a general update and business overview of where the company is today and our positive outlook for the fiscal 2027. Before we get into the fiscal results, I'll provide a high level overview of Avante. Avante is a leading provider of security operatives and technology enabled security solutions to residential and commercial clients. Avante's mission is to deliver an elevated level of security globally with white glove mentality to high net worth families and corporations alike. Our platform today spans five core areas. Security systems, our advanced burglar alarms, integrated camera systems, and smart box dual factor monitoring backed by our 24-7 professional oversight from our state-of-the-art control center. Protective services, our full range of physical protection including highly trained executive security operatives, secure driving, rapid alarm response, and mobile patrols. Halo, our AI-powered video analytics platform delivering real-time monitoring, facial recognition, and gun detection across residential and commercial spaces. Avante Black, our discrete, specialized services delivering worldwide, including secure international travel and transport, complex investigations, and covert operations. And HomeWorks, our premium home management offering, including better trades and maintenance. Avanti is headquartered in Toronto, Ontario, and we have approximately 201 employees in the company. Today, the security landscape for high net worth individuals has become more complex than ever, with rising geopolitical tensions, increasing incidents of targeted crime, and growing concerns over personal safety. The need for a sophisticated security solution has never been greater. High profile individuals are no longer just seeking traditional protection. They require comprehensive, proactive measures that integrate advanced technology with expert oversight. At Avante, we understand these evolving risks and are committed to providing elite security services that offer not only protection, but also peace of mind. I'm pleased to report that during the fiscal 2026, our teams completed over 680,000 patrols, executed over 2,600 secure transports, and responded to just under 28,000 alarm events, maintaining an average response time of six minutes or less. On today's call, we will walk through the following topics. First is our Q4 and fully fiscal 2026 financial results with Raj. We'll discuss more detail shortly. Second is the innovation at Avante, accelerating our growth. And lastly, our positive outlook for fiscal 2027. I would now like to return to to turn it over to our CFO, Raj Kapoor, who will discuss our financial results for the fourth quarter and the full year of fiscal 2026.

Thank you, Manny, and welcome, everyone. I am pleased to report another year of growth in revenue and adjusted EBITDA for Avante, capping off a strong fourth quarter to close out fiscal 2026. For the full fiscal year ended March 31, 2026, Avante achieved revenue of $37.2 million, compared to $33.8 million in fiscal 2025, an increase of 10%. Revenue growth was driven by several divisions, including the company's secure transport division, which experienced an increase of 24% in revenue compared to the previous year. Additionally, NSSG revenue experienced a growth of 67% over the previous year, including an increase in its consulting division of 97%. adjusted EBITDA for the full fiscal year grew to $2.3 million compared to $1.8 million in fiscal 2025, an increase of 30%. EBITDA growth was driven by an increase in revenue in our higher margin businesses and achieving greater operating efficiencies. Our fiscal 2026 full year results are as follows. Reoccurring monthly revenue or RMR of $17.2 million compared to $13.8 million an increase of 24%. Gross profit of $15.6 million compared to $13.3 million, an increase of 17%, driven by revenue growth in the year and improved gross profit margins. Gross margin of 41.8% compared to 39.3% fiscal 2025, an improvement of 250 basis points. This full year performance reflects the continued Turning now to our fourth quarter results. For the three months ended March 31, 2026, Avanti achieved revenue of $10.5 million compared to $9.3 million in Q4 of fiscal 2025, an increase of 12%. Adjusted EBITDA for the quarter was $509,000 compared to $287,000 in Q4 of fiscal 2025, an increase of 77%. Our fiscal fourth quarter 2026 results are as follows. Recurring revenue of 4.8 million compared to 3.5 million, increase of 35%. Gross profit of 4.7 million compared to 3.3 million, an increase of 42%. Gross margin of 45.2% compared to 35.7% in Q4 fiscal 2025, a significant improvement of 950 basis points. The company's growth has been driven by the Our business model remains predictable, with a significant portion of our revenue reoccurring in nature. 45% of our revenue in fiscal Q4 came from contracted reoccurring revenue, providing strong visibility and predictability for future performance. Reoccurring revenue increased 35% in fiscal Q4 compared to the same period last year. Other revenue in Q4 fiscal 26 increased was elevated due to the increase in one-time NSSG engagements tied to heightened geopolitical issues in the Middle East during the quarter. Our client contracts are typically one year in length, and we maintain a 98% client retention and renewal rate, demonstrating the strength of our value proposition. I'm pleased to report that we have maintained the strength of our balance sheet, giving us the flexibility to fund the company's organic growth initiatives. As of March 31, 2026, Avante had $6.2 million in cash and cash equivalents compared to $4.7 million. As of Q4 2025, an increase of 32%. We have access to a $12 million undrawn line of credit, which we intend to use Our working capital as of March 31, 2026 was $4 million. We remain able to continue funding our growth with cash flow from operations. Overall, the company is operating from a very strong financial position. Revenues are growing, profit margins are increasing, and our cash is improving. I will now turn the call back over to Ken.

Thank you, Raj. I will now discuss how our innovation continues to accelerate growth at Avante. Our company was founded on the principle of combining cutting edge technology with best in class security operatives and innovation remains at the heart of our strategy. I'd like to take a moment to walk through two of our key growth drivers, MAST and NSSG. MAST, our Mobile Automated Surveillance Tower, is an unmanned solar-powered wireless communication security tower and has been a significant area of momentum for the business. We are seeing strong early traction across multiple verticals, including construction, parking, telecommunications, law enforcement, retail, events, and oil and gas. We are experiencing a growth pipeline of opportunities as market awareness of mass increases. Some of our recent wins are listed here on our slides. We secured a deployment agreement with the Ontario Regional Police Force for our shotgun detection capability to be installed across three crime locations, further demonstrating the strength of mass expanded threat detection capabilities. We also partnered with Target Park to deploy masks across their above ground parking lots in Canada and the United States. We're selected for the second consecutive year to provide full perimeter security coverage for Cirque du Soleil, Louis Lucia production in Toronto. And deployed masks for remote AI video monitoring in Toronto during the FIFA World Cup tournament. On the operational side, our global supply chain is now fully established, enabled us to deliver mask unit to any port of any of entry worldwide. We currently have 29 masks and boxy units deployed and we have 18 additional mask units now in production on order for delivery within the next four weeks, allowing us to support rising demand and reduce lead times as deployment activity accelerates. We are also building out our sales and customer support capabilities to meet growing demands across the platform. We currently have over additional 100 units on our sales pipeline. With its sustainable design, networked architecture, and highly flexible deployment model, Mass as well positions to become a high growth recurring revenue contributor to our performance as adoption continues to expand through calendar 2026 and beyond. Turning now to North Star Support Group, or NSSG, our global risk management and crisis response subsidiary. As a reminder, we acquired a 55% stake in NSSG in September of 2023. NSSG executes strategic advisory and bespoke implementation solutions for international businesses operating in challenging security environments and complex jurisdictions. A key competitive advantage for NSSG is its global footprint. with offices and representation across Europe, the Middle East, North America, and Africa. NSSG is well positioned to leverage its global reach to support multinational clients, including Fortune 500 companies operating in complex and high-risk jurisdictions. Since acquisition, we've accelerated NSSG's growth by tightly integrating NSSG with Avanti's technology platform, combining its deep frontline risk services with our innovation infrastructure, intelligence tools, and advanced security technology. This integration is also allowing us to introduce Avante's technology into new global markets including Europe and is helping our team close large, more complex international contracts and differentiating us through our technology. Financially, NSSG delivers 67% revenue growth in the fiscal 2026 compared to 2025, driven by strengthened commercial execution, improved global sales practices, and rising demand for specific risk management services, including 97% growth with its consulting division. NSSG also delivers a 52% gross profit margin in the fiscal 2026, underscoring the high margin nature of its specialized risk management services. I will now conclude this call with some comments on our positive outlook for fiscal 2027. As we look ahead to fiscal 2027, our priorities are as follows. Increase recurring revenues by developing and scaling our halo and mass deployments across new verticals. Improve consolidation adjusted EBITDA margins driven by an increase in higher margin service lines and greater operating efficiencies. take advantage of our consolidated opportunities within the fragmented security services industry through disciplined M&A and to continue to expand NSSG international secure transportation investigations and consulting revenue. We expect growth across NSSG, Halo, MAST and Avanti Black in the fiscal year ahead and we remain focused on driving organic growth across the businesses. We also see meaningful opportunities to expand our service offerings to customers in new industries. We believe we have laid an excellent foundation for the company and the positive outlook for fiscal 2027. Meanwhile, we are actively seeking new opportunities to expand and enhance our services through acquisitions. Finally, I want to thank the entire team at Avante, including the employees whose hard work elevates the company to higher levels. We want to thank our customers around the globe who trust and rely on us to manage their risk and provide elevated security solutions and services. Last but not least, I'd like to thank you all for joining us on this call today. We look forward to providing more updates next quarter. I will now hand it back to Rajen for questions.

With that, we will now open the call to questions. To submit your questions, please use the Q&A button on the bottom of your screen. Please note that priority will be given to questions from analysts. We have Gabriel Leung of Bacon Securities on the call. Mr. Leung, please go ahead.

Good morning and thanks for taking my questions. I've got a couple of things. Manny, can you talk a little bit about the Target Park agreement, the recent agreement, how that came about and how you think that rollout is going to play out over the next 12, 24 months?

Well, it's a unique opportunity for us besides the issue that above parking facilities have where places like hotels are getting their cars broken into and stolen or other above ground parking facilities where cars are being stolen. There is a technology that we're working on with Target Park to be able to automate billing processes in the United States where if somebody comes in and parks their car, we read the plate. They walk to the machine to enter their driver, their license. I'm sorry, there's a little bit of noise in the background. Their license plate and they punch in two hours. When the person comes back to pick up their car, They leave and if they take three or four hours, the software in the back end via the mask will determine that they overstayed what they paid for and automatically take an issue to their home. This is something that is allowed in the U.S. We can't work on that in Canada yet, but we're working on those solutions. It's a very big opportunity and it's opening up a lot of other opportunities for us in the above ground parking businesses.

Gotcha. And I know you talked about sort of 18 additional mass units coming in. You know, are those dedicated specifically for Target Park or for some other stuff you're working on as well?

We have some other stuff that we're working on in Northern Ontario, very unique processes. It's very exciting the way things are getting put together. I'm preparing to put another order in for Europe and Africa. As we have interest in Cairo, we're deploying two in Cairo, two in Athens, and we have a meeting tomorrow for Germany.

Gotcha. No, that's great. And then just shifting over to NSSG, I mean, the revenue profile there has been quite solid over the last couple of quarters. I think it was a record high in Q4. You know, you mentioned part of that was due to some of the evacuation work you're doing, I guess, in the Middle East. How should we think about that revenue profile in Q1 and, you know, towards the back half of this year? Do you think the Q4 level is sort of sustainable or would you expect a pullback?

No, absolutely sustainable. And I'm actually in Bucharest right now. And we have a lot of exciting projects on the go, not only with NSSG traditional business, but because they're introducing MAST, they do have opportunities and doors that are opening. For example, the Cairo project is a NSSG project. and even here in Romania, they have projects that they're talking to. They're really working hard in Ukraine. So we have opportunities all over the world. And NSSG is opening those doors since they have a very good presence in this part of the world.

Gotcha. And then just moving over to Halo, just to remind us again, where you're at in terms of rate of adoption within your core sort of high net worth residential market right now, your customer base, I guess, and what the opportunity is in terms of upsell on Halo.

Thank you very much. because we're moving outside our core six minute response areas to general public who wanna have the detection of trespassers and for us to be able to communicate to them via these cameras that we've manufactured.

Maybe one last question for Raj. In terms of the EBITDA margins, I saw they dipped a little bit from Q3 to Q4. I'm just curious if there were some additional costs in Q4 and what your expectations would be in terms of EBITDA margins going into Q1 and for the current fiscal year?

Yeah, we had a few additional costs related with some of your end adjustments. We do expect the EBITDA margins to bounce back this coming fiscal year.

Gotcha. I appreciate that. Thanks for the feedback and congrats on the progress. Thank you, Gabriel. Thanks, Gabriel.

Thanks, Mr. Leung. We also have Pavitra Senga of Haywood Securities. Pavitra, please go ahead.

Hi, guys. I'll be asking questions on behalf of Gianluca Tucci of Haywood. Congrats on a great quarter and year, by the way. Thank you, Pavitier. You know, as we look ahead to 2027, should we be thinking about this quarter and year's gross margin as the new baseline, or do you see more further improvement here ahead? And does your recurring revenue have a stronger gross margin profile that's attributing to that?

Yes, our recurring revenue has a stronger growth module. We will be growing. This isn't the... everything is very exciting. And the baseline that you were referring to is just the start of our opportunity. I see tremendous growth. And as we work together as a team, all our employees are completely in with us and we're really moving quickly and efficiently. And again, the opportunity is very exciting in the future.

Just to add to that, we do expect growth in both gross margin as well as adjusted EBITDA. With gross margin, we expect those margins to increase as we get to scale with our new products. That will translate also to the bottom line, to adjusted EBITDA. But at the same time, we're also looking at increasing our efficiencies within the company, and that would impact our adjusted EBITDA as well.

Great. And with the recurring revenue seeing nice growth, what is the outlook for this year on recurring revenue in 2027? And is the relationship between the recurring revenue and mass deployments linear? Or how should we be thinking about that correlation there?

Yes, it would be linear. We would expect our reoccurring revenues to increase over the next year as we continue to deploy more mass projects, as well as continue growing our traditional business. Our traditional business is growing at a rate of about 10% to 15% per year.

Great. And then finally, if you can speak to the M&A pipeline, are you primarily looking at smaller Canadian tuck-in acquisitions or are there other larger international opportunities similar to NSSG?

There's lots of discussions. We're looking at both. We're looking at little tuck-ins and we're looking at some larger opportunities around the world.

Great. Thank you.

Thank you, Mr. Senga. We have a question here from a listener. Can you provide any additional color on the mast units heading to Cairo, Athens, and Germany, as you mentioned? Are these pilot projects with potential to scale?

Yes, they're pilot projects, but they're paid pilot projects. Alessandro Martello, Emmanuel Mounouchos, Raj Kapoor Alessandro Martello, Emmanuel Mounouchos, Raj Kapoor for example, we have a company we're working with that deploy around the world. They're looking for more of an interesting thing about espionage and people coming into their outdoor equipment and trying to So it's very exciting how people recognize that our towers are much more flexible, much more intelligent than what's on the market today. And Europe doesn't really have the same type of towers that we're deploying with the same halo technology that we could modify as needed. So it's very, very exciting.

Thank you. There are no further questions. I will now pass the call back to Manny for closing remarks.

In closing, I want to thank everyone once again for joining our call today. Thank you to the analysts for their questions. We look forward to our next update for the first quarter of fiscal 2027.