Avante Corp.

Good afternoon, everyone. We will be starting in one minute. Thank you everyone for joining us today and welcome to Avante's fiscal first quarter investor webinar covering the three months ended June 30th, 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 earlier today. Listeners are also encouraged to download a copy of our interim financial statements and management discussion and analysis from cedarplus.ca. 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 advantage 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-GAAP measures. For more information on how we define these terms, please refer to the definitions set out in our management discussion and analysis. And with that, let me turn over the call to Mr. Emmanuel Mounouchos, founder and CEO.

Thank you, Rajen, and welcome everyone. We truly appreciate everyone joining us today. On today's call, our CFO, Raj Kapoor, will review our fiscal first quarter results and I will provide a general update and business overview of where the company is today and a positive outlook for fiscal 2027. Before we get into the financial results, I would like to begin with 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, which is 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, which is our full range of physical protection, including highly trained executive security operatives, secure driving, rapid alarm response, and mobile patrols. GALO, which is our AI-powered video analytic platform delivering real-time monitoring, facial recognition and gun detection across residential and commercial spaces. Avante Black, our discrete specialized services delivered worldwide including secure international and transport travel, complex investigations and covert operations and HomeWorks, our premium home management offering including vetted trades and maintenance Avanti is headquartered in Toronto, Ontario, and we have approximately 212 employees in the company. Today, the security landscape for high net worth individuals has become more complex than ever. With rising geopolitical tension, increasing incidents of targeted crimes, and growing concerns over personal safety, the need for sophisticated security solutions 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 Q1, 2027, our teams completed over 182,000 patrols, executed over 600 secure transports. On today's call, we will walk through the following topics. First is our fiscal Q1 to 2027 financial results, which Raj will discuss shortly. Second, I will discuss a couple of our key catalysts for the fiscal year. And lastly, our positive outlook for fiscal 2027. I would now like to turn it over to our CFO, Raj Kapoor, who will discuss our financial results for the first quarter of fiscal 2027. Raj?

Thank you, Manny, and welcome, everyone. I am pleased to report another quarter of growth in revenue in adjusted EBITDA at Avante. For the three months ended June 30th, 2026, Avante achieved revenue of $10 million compared to $8.7 million in Q1 of fiscal 2026, an increase of 14%. Adjusted EBITDA for the quarter was $818,000 compared to $359,000 in Q1 of fiscal 2026, an increase of 128%. Our fiscal first quarter 2027 results are as follows. Reoccurring monthly revenue of 4.3 million compared to 4.1 million in Q1 of fiscal 2026, an increase of 7%. Gross profit of 4.5 million compared to 3.3 million in Q1 of fiscal 2026, an increase of 35%. Gross margin of 44.9% compared to 37.9%. and higher margin segments including Avante Black and NSSG. I'd like to take a moment to highlight Avante's consistent growth profile. On this slide, you'll see our trailing 12-month revenue over the past several quarters. Notably, our TTM revenue has grown sequentially every quarter over this period, highlighting the durability and consistency of our growth trajectory. TTM revenue grew to $38.5 million in Q1 of fiscal 2027 compared to $34.6 in Q1 of fiscal 2026, an increase of 11%. The company's growth has been driven by the onboarding of new customers through focused sales efforts, enhanced customer support, and launch of new services and strategic acquisitions such as NSSG. Our business model We expect reoccurring revenue to increase in the coming quarters as contracts are renewed and new ones are secured. Our client contracts are typically one year in length and we maintain a 98% client retention or 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 June 30th, 2026, as of June 30, 2026 was $3.6 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

Thank you, Raj. Our company was founded on the principle of combining cutting edge technology with the best in class security operatives and innovation remains at the heart of our strategy. I will now discuss what we believe are two key catalysts at Avante for fiscal 2027. The first is MAST, which is rapidly deploying across multiple industries and internationally. The second key catalyst I will discuss is Avante Black, which was a significant contributor to our EBITDA margin improvement in this quarter. Mass, 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 have deployed over 30 units to date with additional orders in production. Our partnership with Target Park continues to progress well as we expand deployment across their above-ground parking portfolio, and that relationship has also opened the door to additional conversations, including with a prospective partner in Germany. Internationally, we're pleased to share that NSSG helped secure a contract for two mass units supporting a construction project in Cairo, and two additional units have arrived in Athens that are currently being deployed. Closer to home, we continue to see strong interest from rural communities in Northern Ontario, particularly around mining, rail, and community safety applications, and we're in the active discussions on a number of potential opportunities in the space. Combined with our pipeline across parking, construction, events, and law enforcement, we expect this to translate into meaningful ramp-up deployment through the fiscal 2027. We are also building out our sales and customer support capabilities to meet growing demand across the platforms. We currently have over 100 units in our sales pipeline. With a substantial design, network architecture, and highly flexible deployment model, Mass is well positioned to become a high-growth, recurring revenue contributor to our performance as adoption continues to expand. Since its launch in January 2023, Avanti Black has rapidly evolved into one of the most strategic business lines and now represents over 10% of the company's total revenues. Avanti's adjusted EBITDA margins were extremely strong this quarter at 8%. Avanti Black was a key driver of this as it delivered adjusted EBITDA margins exceeding 25%, underscoring its profitability profile and its growing contribution to the company's overall margin improvements. We continue to see a strong and growing pipeline of opportunities for this service, and we expect Avanti Black to remain a meaningful contributor to the company's growing growth forward. This performance reflects several powerful tailwinds, including escalating global risk environments, which have increased demand for specialized executive level protection and intelligence support. Our global operating reach, which allows us to serve clients anywhere in the world and our ultra high end segment remains largely underserved, enabling Avanti Black to build a distinct leadership position in mission critical risk mitigation. At its core, Avante Black represents the pinnacle of elite risk management, redefining how protection, intelligence, and crisis response are delivered. The division has purpose built by assembling a world-class team, including seasoned experts from former members of elite units who bring unparalleled covert operation, role experience, and precision engineering methodologies to every engagement. Alongside NSSG, Avanti Black has been a key driver of Avanti's overall adjusted EBITDA margin expansion this quarter and will remain focused on growing these higher margin offerings as part of our broader strategy to enhance profitability across the businesses. I'll now conclude this call with some comments on our positive outlook for fiscal 2027. As we look ahead to the remainder of fiscal 2027, our priorities are as follows. Increasing recurring revenues by developing and scaling our halo and mass deployments across new verticals. Improved consolidated adjusted EBITDA margins. Driven by an increase in higher margin service lines and greater operating efficiencies. Take advantage of consolidating opportunities within fragmented security service industry through disciplined M&A and continue to expand NSSG international secure transportation investigations and consulting revenues. We expect growth across NSSG, Halo, Mass, and Levante Black for the remainder of the fiscal year, and we remain focused on driving organic growth across the businesses. We also see meaningful opportunities to expand our service offering to customers and new industries. We believe we have laid an excellent foundation on the company and have a 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 our 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 us and rely on us to manage the risk and provide elevated security solutions and services. Lastly, 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 at the bottom of your screen. Please note that priority will be given to questions from analysts. We have Gabriel Leung from Beacon Securities on the call. Mr. Leung, please go ahead.

Good afternoon. Thanks for taking my questions and congrats on the progress. Manny, got a couple of questions on MAST first. I know it's only been a month since our last conference call update, but have you and Target Park been able to fine tune what the deployment, what the deployment cycle is going to look like with this particular customer and with MAST?

Well, we met, we actually met last week to discuss further how we're going to deploy. It is a fairly large project and it is in the U.S. and in Canada. So, you know, the plans are, you know, to move forward quickly, but we want to do it right. both companies are working hard. Our back end is being deployed so that we could monitor the life of the mass units, the heartbeat. We're monitoring about 30 points remotely now. But it's only been a month. So we're really focusing on deploying rapidly. I think we have two masks being deployed next week for Target and a lot more coming on board shortly.

Gotcha. You talked about some initial deployments over in Cairo on the construction side and in Athens as well. Could you talk about those two opportunities and what they could evolve into over time?

The Cairo project is a huge construction project and we expect more MASTs to be deployed. The client wants to experience what MAST has to offer. And through NSSG, they're really promoting the MAST technology to other countries that they're working in. So it's all very exciting, mostly based around the construction. In Athens, we have deployments of the two mass units, again, paid pilots, for more along the coastline and the ports. I can't really say more than that.

Gotcha. The sales pipeline you're talking about of 100 mass units, are you able to talk about, you know, is that comprised of, you know, several opportunities, one larger opportunity, and are they competitive in any way?

they're comprised of two major opportunities in completely different spaces.

Would you be competing with them? Are they competitive opportunities or are you being sole source potentially?

No, no, they're completely different industries.

Gotcha. Maybe one last question for me. When we look at the opportunity you've got in the core business, the newer business lines, also Avanti Block and NSG, are you able to set some goalposts on what you would like to achieve for both the top line and margin perspective for fiscal 27?

Well, you know, the culture is to drive sales and I'm a very, I have zero patience. So we, you know, my team follows me and they're all passionate and they work very hard to drive. So it isn't, we don't have targets to, to meet because we want to always exceed the day before, uh, It's a very, very unique situation where everybody represents Avante in the sales capability. Even our frontline responders are driven to increase sales. But we have some targets in mind that we can't talk about.

Gotcha. I appreciate the update and congrats on the progress. Thank you.

Thank you, Mr. Liang. We also have a couple of questions from Gianluca Tucci from Haywood Securities. First question is around our gross margin expansion. So gross margin expanded approximately 700 basis points year over year. How much of that is a structural mix shift towards the higher margin segments we mentioned, such as Halo and NSSG versus anything one time in the quarter?

The majority of it is structural. We've been working very diligently and increasing our gross margins by watching things such as our overtime rates, making sure we have a full staffing on our patrol side. Also, as we increase our sales in new products such as masks, this will also increase our gross margins as well.

Thank you, Raj. And a follow-up question for Mr. Tucci. So you're debt-free with a significant cash balance and unused credit line with positive operating cash flows. What's the priority order between funding organic platform investment and M&A? And can you characterize the size or type of acquisition targets you're evaluating?

Well, we have some tuck-ins that we're working on and some larger opportunities around the world. More of a technology service-based solution. Very exciting. The opportunities are very big for us in the way we bring things together in our transition team.

Great. Thank you, Manny. We also have a question from Daniel Rosenberg from Paradigm. Could you walk through the capital requirements or capacity requirements for your expected mass deployments discussed so far?

Yeah, we don't really have much concerns about our capital requirements. We have about $6.8 million in cash, zero funded debt, $12 million available to us. We're also positive in our operating cash flow. This quarter alone was just under $1.2 million. And we feel we can fund it with our current cash plus our available debt.

Thanks, Raj. And a follow-up question for Mr. Rosenberg. Can you speak to the market expansion opportunity in terms of which of your products or services are leading? Do you expect all products and services of Avante to be rolled out to new geographies over time?

Well, MAST is really growing in South America, Europe, the United States, Canada, but also Voluntary Black. We're working on a global opportunity with a partner that will also... Well, two partners that will... help us grow and introduce Avante Black to different communities, different countries. The core business is growing locally. We talked a little bit about franchising. That's going a little slower only because of time, not because of the lack of interest. So we are looking at a global opportunity. We feel that there's a lot more money available for Avante outside in a bigger picture kind of view.

Thank you. And we have a question from a listener. Of course, there's a quarter with very strong gross margins and adjusted EBITDA margins. Can you provide us your outlook on these for the remaining fiscal year?

With regards to our gross margin, we expect it for this fiscal year to be in the range our Q1 came in. Maybe it's a little higher by the end of the year. and with our adjusted EBITDA margins, we achieved about 8% this quarter. The goal will be to end the year between 8% to 10%. Great.

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

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 second quarter of fiscal 2027.

Thank you very much.