Good morning, and welcome to the Gorilla Technology Group's Third Quarter 2025 Financial Results Conference Call. As a reminder, this conference call is being recorded. I would now like to turn the call over to our speakers today, Jay Chandan, Chairman and Chief Executive Officer; and Bruce Bower, Chief Financial Officer. Thank you. Please go ahead, gentlemen.

Thank you very much. Good morning, everyone. Q3 marks the strongest quarter in Gorilla's history with revenue ahead of expectations, operating profit firmly positive, and the bottom line at breakeven. Now we've delivered a clear swing in profitability. We've built a cash position of over $119 million. We've reduced debt to a point of $15.1 million, and we've advanced our AI infrastructure programs across Southeast Asia, Latin America, and the Middle East, securing multibillion-dollar projects. At the same time, we're also creating a historic pipeline for this business. The simple message is that Gorilla is now operating above the analyst model and scaling faster than the market expected. Thank you. Bruce, anything you want to say?

Yes. I'd just like to take a walk through some of the highlights from the quarter and then in terms of where we are overall. So the first, as Jay mentioned, it was a record quarter for us in terms of revenue. The balance sheet, as Jay mentioned, has $121.4 million of cash total. That breaks down to $109 million of unrestricted free cash and then the balance in restricted cash. Debt of $15.1 million means that we're in a significant net cash position of $106 million. This follows on the performance of the business, and it was helped by a fundraise that we did in July. In terms of where we are as a business, you can see that we're on track to meet the guidance for 2025, which is in the range of $100 million to $110 million in terms of revenue. We were talking about EBITDA margins in the 20% plus range and net income margins in the 15% to 20% range. So we remain on track to hit all of those. The gross margins through the 9 months have been a bit over 35%. That's a little bit lower than we'd expect for the full year. So I think we'll be on track to hit the 35% to 40% range for the full year. At the end of the quarter, we had accounts receivable of $36 million, and I know people are looking at that and worried. I'd just like to say that we expect the business to be collecting some of those we've already collected on in the fourth quarter, a couple of significant outstandings in Asia, and then some remaining in the Middle East we expect to collect on. For the 9 months of the year, we had operating cash flow of minus $15 million, and we still expect to either have breakeven or positive operating cash flow for the total year. Another thing speaking about going into the next year is we issued guidance for the next year of $137 million to $200 million. I just wanted to talk a little bit more about how that works, and Jay can help me out as well. But based on our contractual backlog, we expect to realize revenue from signed contracts and where we have delivery timelines and specified contractual milestones. In this case, we have a signed contract with FREYR, and we have individual deployment as part of that contract. The timing is more or less certain but still subject to some change, which is why we opted for a wide range to reflect our conservatism in making our guidance. Nonetheless, the fair contract is still a large contract at $1.4 billion overall, which means over $400 million annualized once up and running, but the rollout will be through 2026.

Thank you, Bruce. Yes, it was a very good quarter, wasn't it? But if anyone is still wondering whether this is structural, I would gently suggest that they may need a new pair of spectacles. Now just to highlight what Bruce talked about and clarify some of the proof points to all the naysayers, our revenue, the consensus analyst model was roughly about $26 million to $26.2 million. Our actuals were at $26.5 million. Gross profit estimate was $9.5 million. We did about $9.9 million. Our operating income, IFRS operating income was expected to be at minus $6 million. We achieved a positive $4.4 million. That's a significant swing. Our adjusted EBITDA was about $5.6 million estimated, we achieved $6.8 million. Adjusted net income was about $3.5 million. We completed quarter 3 at $6 million. Our EPS non-IFRS was $0.26, and we came in at $0.257, which is in line. Our EPS IFRS was expected to be at negative $0.8. We completed it at breakeven, which is 0.00, marking a 100% improvement. Our analyst implied debt was at about $21 million. Gorilla's actual was at about $15.1 million, and we're looking to reduce that substantially before the year's end. What we also had modeled was the unrestricted cash, the restricted cash, and the total cash position, and we are predominantly on top of everything today. Why? Because we delivered profitability at an operating level, not adjusted, not sprinkled with fairy dust—this is proper profitability. We ran the business efficiently, delivering big projects across the region while controlling our costs. This is not a one-off; this is what we call discipline. We achieved this while scaling efficiently. Most companies only turn profitable when they stop investing, but we turned profitable while executing national infrastructure programs across Southeast Asia, the Middle East, and Latin America. Anyone who has ever worked in this sector will tell you that it is not just coincidence; it is pure operational muscle. Third, we have visibility. When I say visibility, I mean proper visibility. The $1.4 billion Southeast Asia data center project is not a rumor. It's a contract, and it is underway, meaning it is already flowing into our scheduling and revenue plans for 2026 and beyond. The first phase alone guarantees $100 million of annual revenue for the first 3 years. This is the definition of structural. Regarding our pipeline of $7 billion, it did not come from luck; it has been generated from governments, telcos, and serious institutions that are designing their national AI and digital sovereignty strategy. Our role in those programs is not episodic; it is recurring, expandable, and increasingly indispensable. Our balance sheet is a strategic weapon for us, over $110 million of unrestricted cash, $15 million-plus of debt, and working with major partners like Telstra on data centers. We are not just hoping to deliver; we are capitalizing on our ability to deliver. Finally, with the deepening partnerships with likes of Intel, Edgecore, HPE, and NVIDIA, and expanding our sovereign 5G local interception cybersecurity platform, we are not a one-hit wonder. These are partnerships that last because we execute. So to recap our position: we are not at a peak today. If anything, this is the foothill before the climb. Our numbers are consistent. The profitability is real. The backlog is defined, and the demand curve in front of us, particularly on AI data centers and national infrastructure programs, is significantly larger than what is included in today’s guidance. With that, I’d love to turn this over for questions.

Our first question today comes from Mike Latimore from Northland Capital Markets.

Congrats on the great results here. In terms of the guidance for '26, what are you assuming on this large deal contribution, kind of low end to high end of guidance? Or what are the factors that get you to the lower high end of that guidance?

Mike, good to hear from you. Let me answer it with numbers first. For 2026, we've guided a revenue range of roughly around $137 million to $200 million. This is built on two main things. One is our contracted backlog with very clear delivery milestones. The second is the first phase of the Southeast Asia data center project, which alone contributes $100 million from '26 to '28. Now there is zero revenue in that guidance from the total $1.4 billion program and zero from any other new mandates that are being structured. The reality is that the remaining phases of the AI data center program are much larger than Phase 1. As the timelines and site constraints are finalized with customers, we will then extend both our '26 and '27 revenue base quite materially as well. On top of that, as you know, we've also built a pipeline with several national projects in late stage that also touch data centers, public safety, network intelligence, our 5G inception programs, and so on. None of that is in the current guidance of 2026. So to clarify, the range we have given you is based on a conservative assumption of what we can deliver at present.

All right. Perfect. Any color on EBITDA margins, what you think they might do in '26?

Sure. We would guide for a sort of 15% to 25% range.

Okay. Good. And I guess just last one for me. Can you provide a little more detail on the deliverables on this large contract in '26? What are you going to deliver in the first quarter and throughout '26?

That's a good question. The right way, Mike, to see the first $100 million is the run rate it builds. Personally, I think most people expect that once you sign a $1.4 billion contract, it's a light switch, and the revenue starts flowing in. No, it doesn’t work that way. The first phase is about 6 to 8 megawatts, with several hundred high-density AI racks, and they do not all come online at once. They come online in planned batches as the power, cooling, and all of the network zones are commissioned. So revenue ramps up in each batch as they are activated. Secondly, the GPU capacity becomes a crucial factor, following through here. As the racks go live, for example, we integrate the cluster through our NVIDIA and partner ecosystem, which drives up the GPU as a service line. On top of that, we layer our services over time. It’s not all at once—services like video intelligence for cities, transportation, and borders, big data analytics, building large language models for both the government and telcos, and integrating inference engines, cybersecurity, and network intelligence platforms. So as the national workloads move into the platform, and utilization grows, typically from 30% up to 70-80%, that deepens our revenue at the same time. Just to bounce back to what Bruce said earlier, if you want us to reach about $300 million to $400 million in steady-state revenue, the GPUs must be operating fluidly across the board as well. That controlled ramp, as I indicated, is not a big bang; therefore, we anticipate that we will get everything commissioned and operational by the end of 2026.

Our next question comes from David Williams from Benchmark.

Congratulations on the progress and success here, gentlemen. I guess maybe one of the first questions is kind of around the guidance. Obviously, you talked about this a bit earlier, but it feels like there is some potential upside there. If you kind of think about the risks in the market and maybe from the supply side and just the market dynamics, how would you gauge that from the midpoint of the guidance up to the upper end? I would suspect that there's more upside opportunity than downside risk. Is that fair to assume?

David, it is absolutely fair to assume that there is more upside. Let me break this down for you. First, the timing of customer deployment is critical. Large AI infrastructure and data center programs rely on client site readiness. There has to be site access, as you know the market well, power allocation, import clearances, and customer procurement cycles—a slight change in timing can significantly affect revenue. Secondly, supply chain constraints are a big challenge today. There is a high demand for GPU servers across the globe. Components associated with networking equipment can create longer lead times. Recently, the price of memory shot up 40% in the last two months. We have to take into account regulatory matters, project phasing on multiyear platforms, and geopolitical sensitivities in regions like Southeast Asia, the Middle East, Latin America, etc. Notably, the upside for us is tied to when these programs go live; we aim to make sure that they come online by 2026, activating all of these clusters and collaborative opportunities with NVIDIA. Our focus ensures that our upside minimizes the risks on the lower end.

Can I add something to...

A couple of other things to keep in mind, David. The first is the data center opportunity we have is an umbrella contract with Freyr. When we announced it, the $1.4 billion was based on the scheduled deployments we had then. There is always the possibility that additional deployments could be added, creating potential upside. The second thing is, while we’re discussing the contractual backlog and data center side, we haven't talked about anything else. Gorilla is actively bidding for government contracts and has recently submitted several bids. We are keen on favorable responses from a couple of governments in Asia. Additionally, the MOUs we've signed do not enter our guidance until we obtain definitive dates and amounts. However, as soon as we have that, they will be factored into the guidance for the next year.

Maybe, Bruce, is there a way to size the magnitude of your backlog? How should we size that in relation to your total backlog and anticipation for next year?

The backlog for us is strictly defined. We have $85 million as the backlog for 2026, where we have the exact date and signed and for implementation now. Then we have the data center contract, which is signed and being implemented, but the exact timing of deployment is still somewhat in progress. The pipeline involves qualified leads that we expect decisions on in the next 3 to 6 months, where budgets exist, but it doesn't yet have signed contracts with amounts and dates. So there's a clear distinction; the backlog is very strict, while the pipeline is about converting from customer interest to definitive agreements.

To add some color to that, David, our pipeline has grown enthusiastically. If it grows any faster, I think I might need to send a congratulatory card to myself! The deals are very mature now. A couple of years ago, we were building POCs and signing MOUs. The data center project has exceeded our expectations. But we're not only building data centers; we provide significant ancillary support services. The $1.4 billion was a catalyst, and governments and telcos converted that into greater interest. The demand wave behind the FREYR contract is larger than FREYR itself, which is why our pipeline is well beyond $7 billion. With increasing urgency, the GPU infrastructure demand cannot be considered optional anymore. We’re also working closely with Telstra in Brazil to provide capital and generate sizable data centers. These are not incremental pilots but comprehensive national platforms.

If you think about your competitors in the market and the 800-pound Gorilla, what gives you the edge and why are you winning?

That’s a good question. We’ve proven ourselves through commitment and understanding to governments about their requirements, ecosystems, and how we help build national workloads. Gorilla has been in the business for 24 years, and we aim to be a full-stack AI operator. We design, build, integrate and operate the architecture, and we provide sovereign control alongside predictable economics. Our customers know who manages their infrastructure responsible for uptime and performance. Ultimately, it's about capability; we're executing national cybersecurity infrastructure and have multiple significant projects in numerous regions. We move faster than competitors; our speed of execution and operational discipline are making us preferred partners.

There’s also a cost advantage through our relationships with hardware vendors and better software deliveries, resulting in significant overall project savings. While parts like NVIDIA GPUs carry fixed costs, we can deliver a significant cost-savings on items where flexibility is possible, offering around 30-40% savings with better performance. This reduces the total cost of the data center by 5-7%, which can be huge when we are discussing billion-dollar projects.

Our next question comes from John Roy from Water Tower Research.

To step back and look beyond that, do you need to grow your sales team to turn that pipeline into backlog? What’s your plan with cash? Just curious.

Great questions. Yes, I can affirm our pipeline is at $7 billion, yet we face challenges to sign deals. Currently, our sales teams are already established with over 250 full-time people and over 200 contractors. I'm heavily involved with customers, no matter if it’s a $1 million or $1 billion engagement, as my goal is to also give them confidence in our guidance. My target, personally—not a formal company guidance—is to reach around $500 million of annual revenue by 2027. However, that depends on securing our programs and partnerships over the next 3 to 6 months. Our focus on growth is also reflected in our hiring spree across various regions, including Taiwan and India, where we’re looking to establish a significant presence.

Regarding cash, major contracts require upfront capital investment from Gorilla. Sometimes, guarantees and revolving capital for government customers can be required, plus CapEx for various data center projects—we are negotiating with banks for financing these. We have term sheets from lenders that will finance the vast majority of them. That said, we have ample funds to cover initial deployments and anticipate solid cash flow in the coming months.

Congrats on the achievements. Regarding the Freyr contract, I assume margins are higher than your existing business due to upfront CapEx, and I'm trying to assess the cash return versus EBITDA margins.

You're correct, Brian. Freyr is not merely a construction contract for me; it's a long-term infrastructure relationship in Southeast Asia. We’re designing, building, operating, and evolving this over years. Once live, our focus isn’t just hosting racks. We layer numerous services atop it, and Freyr acts as the starting point for us to build considerable margins as we advance the value chain.

As we enter 2026, how do you see the economics changing compared to '25 in terms of revenue? How does the mix shift?

This is crucial. My first job was to derisk the business by securing contracted programs. Initially, 95% of our revenue was from government customers, and we aimed to move towards long-term predictable collections to mitigate cash exposure. As we've built this new framework, we're seeing a strengthened balance sheet, reducing debt responsibly, leading to more predictable revenue cyclical versus prior operations. Thus, as we head into '26, our financial outlook is about having more stability and predictability quarter on quarter.

I'm also curious about the number of MOUs and their progress, particularly around the Amazon One contract.

Yes. The One Amazon project is progressing well. We've completed a proof of concept in Panama and are advancing in Mato Grosso. There’s an initial $100 million investment from us expected to yield positive outcomes. Progress involves many metrics connected to active monitoring and environmental intelligence streams over time. We’ve also signed with Telstra for a broader project, and government clients are providing high levels of engagement. Our team’s efforts are ensuring each platform evolves efficiently and effectively.

Do you have key investments planned now regarding personnel or facilities to capitalize on upcoming opportunities?

Yes, absolutely. We are actively pursuing M&A for execution capabilities while expanding into fast-growing markets. India, for example, currently has a potential $9.5 billion AI market, expected to balloon to $130 billion by 2032. This shift mandates investment in local teams and regulatory strategies to be key players in the AI infrastructure sector. Similarly, in the U.S., we’re pursuing acquisitions that provide credibility and execution depth, crucial for our established platforms and clientele. This is not about acquiring revenue but about acquiring capabilities for future scaling.

Our last question comes from Bart Boone from Red Chip.

Jay, Bruce, congratulations on a great quarter.

Thank you.

I have a few questions. We know you design, build, and operate AI data centers while providing GPU as a service with partners like EdgeCore and Intel, and you’re deepening ties with NVIDIA. How should investors perceive the unified flywheel you are constructing and Gorilla's strategic role in the next AI compute infrastructure wave?

Excellent question. We're not operating in a single corner of AI infrastructure; we are constructing the entire engine, starting with data centers as the anchor. We design, build, and run these centers, seeking long-term contracts on hosting, power, and capacity. We overlay GPU as a service using NVIDIA-based platforms, developing a revenue model that scales alongside demand. Essentially, as we and our customers grow, our revenues expand—this is what we refer to as usage-based recurring revenue.

Shifting focus to Quantum-safe networks and the Intelligent Network Director platform for lawful interception. How can we view them as not just standalone products but gateways into larger infrastructure initiatives?

This is often misunderstood. The market for post-quantum cryptography alone is expected to surpass $100 billion globally, as nations upgrade to secure their systems in various domains. The Intelligent Network Director isn’t merely a product; it is effectively managing a country’s national nervous system when permitted to monitor network flows. This role positions us well for securing future projects ranging into enormous budgets beyond today’s contracts.

Over the past few years, you have transitioned from a survival mode to a position with record revenue, strong profitability, and a major pipeline. What do you think the market is missing about Gorilla’s future trajectory?

First, we are no longer merely a project shop. We are shifting towards becoming a sovereign AI infrastructure operator; our projected revenues from Southeast Asia alone could reach hundreds of billions annually. The market seems to overlook our consistently growing pipeline of about $7 billion across sectors. We have more than $119 million of unrestricted cash, which allows us to fund the required infrastructure without compromising our shareholders. These developments will redefine our position, highlighting the Gorilla that emerges beyond the $22 million at public debut, aiming for significant growth metrics that others may fail to recognize.

We have no further questions. I'd like to turn the call back over to management for any closing remarks.

Thank you. Thank you, everybody, for taking your time and listening to us. To our institutional and retail investors, I want to express that your conviction has carried us from survival to scale. Through every challenge, you stood with me, Bruce, and the rest of the team. We are not just winning contracts; we are building the AI infrastructure of nations. Your belief has influenced this company, and it will define everything we're building in the years ahead. I sincerely thank every one of you, including those who stood by me and demonstrated their trust. I intend to repay that trust with performance. Thank you, and have a lovely day.

This concludes today's conference call. Thank you for your participation. You may now disconnect.