Good day and thank you for standing by. Welcome to ITRON's fourth quarter 2025 earnings conference call. At this time, all participants are on a 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 11 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 for today, Paul Vincent, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to ITRON's fourth quarter 2025 earnings conference call. Tom Dietrich, ITRON's President and Chief Executive Officer, and Joan Hooper, Senior Vice President and Chief Financial Officer, will review ITRON's fourth quarter results and provide a general business update and outlook. Earlier today, the company issued a press release announcing its results. This release also includes details related to the conference call and webcast replay information. Accompanying today's call is a presentation that is available through the webcast and on our corporate website under the Investor Relations tab. Following prepared remarks, the call will open for questions using the process the operator described. Before Tom begins, a reminder that our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance. Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our Investor Relations website. We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from these expectations because of factors that were presented in today's earnings release and comments made during this conference call as well as those presented in the risk factors section of our form 10k and other reports and filings with the securities and exchange commission all company comments estimates or forward-looking statements are made in a good faith attempt to provide appropriate insight to our current and future operating financial environment Materials discussed today, February 17, 2026, may materially change, and we do not undertake any duty to update any of our forward-looking statements. Now, please turn to page four of our presentation as our CEO, Tom Dietrich, begins his remarks.

Thank you, Paul. Good morning, and thank you for joining our call. ITRON delivered another quarter of record earnings and profitability, underscoring the durability of our model and accelerating demand for grid-edge intelligence. Highlights on slide four include revenue of $572 million, adjusted EBITDA of $99 million, non-GAAP earnings per share of $2.46, and free cash flow of $112 million. These financial results reflect strong execution as our customers modernize the grid and rely more heavily on ITRON solutions. modern civilization depends on energy and water systems that cannot fail and increasingly those systems depend on intelligence itron is the provider of intelligent infrastructure that underpins reliability resilience and safety our value has grown significantly as demonstrated by increased adoption of great edge intelligence outcomes growth record financial results surging annual recurring revenue and the expansion of our offerings through strategic acquisitions. Turning to slide six, our fourth quarter bookings were $737 million with a total backlog at quarter end of $4.5 billion. Continued momentum and grid edge intelligence demand resulted in a record backlog for our outcomes segment. Our fourth quarter bookings were driven by numerous grid edge solutions supporting grid modernization and reliability of infrastructure these include the expansion of a long-standing relationship with exelon through a new multi-year multi-application agreement this extension underscores the business benefits technical flexibility and proven value of our solutions including security consumer privacy and operations optimization another meaningful fourth quarter win involves collaboration with a large early adopter AMI customer to responsibly address operational continuity, business risk, and affordability. Aging legacy systems and readiness for next generation technologies are often misaligned and our customers turn to us to help them bridge this gap. ITRON's utility IQ solution reinforces our commitment to open ecosystems and customer flexibility is designed around interoperability across technologies. Our product and service offerings provide a clear path forward to simultaneously maintain an aging system while smoothly transitioning to more capable and consumer-oriented services. Additionally, we are expanding our partnership with a large Canadian utility by providing additional grid-edge capabilities focused on distributed intelligence, enabling real-time grid visibility, analytics, and control. As an expansion to our commitment to utility resiliency, we announced during the quarter the acquisition of Urbant, a provider of AI-enhanced solutions for emergency preparedness and response, damage prevention, and worker safety. We also announced the acquisition of LocustView, a provider of solutions for digital construction Management, which automates the process from planning to closeout, deploying field-based capture of as-built infrastructure to enhance the speed and integrity of grid build-out. With those acquisitions now closed, we are introducing a new reporting segment named Resiliency Solutions. We are thrilled to welcome these teams to ITRON. Resiliency Solutions expands our reach, allowing ITRON to support our customers through every step of the asset lifecycle, from planning to build out, to operations, to maintenance and protection. iTron is a long-standing industry anchor in the operation space, providing grid-edge technology. Additionally, our leading energy forecasting products are used by 90% of the independent system operators and over 70% of the electricity operators in North America. Over the past years, we have added power flow analysis and planning software solutions to support detailed grid planning and interconnect analysis. The addition of Urban's Emergency Preparedness and Response Worker Safety and Damage Prevention Solution augments our planning, maintenance, and protection offerings. Most recently, LocustView provides leading digital construction management solutions. In total, ITRON supports our customers through the asset lifecycle. Proactive resiliency is a top priority for our customers, which aligns well with our strategic investments and drives higher margins and recurring revenue growth in 2026 and beyond. I will now pass on to Joan to cover the financial results for the company.

Thank you, Tom. I'll review ITrend's fourth quarter in full year 2025 results before discussing our financial outlook for 2026. Financial performance was strong in the fourth quarter and set company records for gross margin, non-GAAP earnings per share, EBITDA, and free cash flow as a percentage of revenue. Please turn to slide eight for a summary of consolidated GAAP results. Fourth quarter revenue of $572 million was higher than the range we expected and lower than the prior year due to planned portfolio changes and the timing of large project deployments. Gross margin was 560 basis points higher than last year due to favorable customer and product mix. Gap net income of $102 million or $2.21 per diluted share compared to $58 million or $1.26 in the prior year. The improvement was driven by higher operating income and lower tax expense. Regarding non-GAAP metrics on slide 9, adjusted gross margin of 40.7% was a record and increased 580 basis points versus Q4 2024. Non-GAAP operating income of $91 million increased 28% year-over-year. Adjusted EBIT of $99 million increased 21%, and both the dollar amount and the percentage of revenue at 17% were new records. Non-GAAP net income for the quarter was $113 million, or $2.46 per diluted share, versus $1.35 a year ago. This is a new quarterly record for the company. Free cash flow was $112 million in Q4 versus $70 million a year ago. The increase reflects year-over-year earnings growth and improved working capital. Year-over-year revenue growth by business segment is on slide 10. Device solutions revenue decreased 7% on a constant currency basis due to the expected decline in legacy electricity products in EMEA and the timing of project deployments in North America. Network solutions revenue decreased 15% year-over-year, primarily due to the timing of project deployments. Outcomes revenue increased 22% on a constant currency basis due to an increase in delivery services and the continued growth of recurring revenue. Our new segment, Resiliency Solutions, which includes revenue from November 3rd when our acquisition of Urban closed, contributed $3 million of revenue. Beginning with the Q1 reporting, the combined locust view and urban results will be reported in this segment. Moving to the non-GAAP year-over-year EPS bridge on slide 11, our Q4 non-GAAP EPS of $2.46 per diluted share increased to $1.11 year-over-year. Pre-tax operating performance contributed a $0.45 per share increase, driven by the fall through of higher gross profit. Lower tax expense had a positive year-over-year impact of $0.69 per share. Turning to slides 12 through 15, I'll review Q4 segment results compared with the prior year. Device solutions revenue was $105 million, adjusted gross margin was 34.4%, and operating margin was 26.6%. Both margin results are segment quarterly records. Adjusted gross margin increased 780 basis points year-over-year due to favorable customer and product mix, and operating margin was up 670 basis points. Network solutions revenue was $352 million with adjusted gross margin of 42% and operating margin of 32.2%. Adjusted gross margin increased 690 basis points year-over-year due to favorable customer and product mix, and operating margin was up 620 basis points. Outcomes revenue was a record $112 million with adjusted gross margin of 41.7% and operating margin of 27%. Adjusted gross margin decreased 230 basis points year-over-year due to lower software license mix, but operating margin increased 420 basis points due to higher operating leverage. Resiliency solutions with revenue of $3 million and an adjusted gross margin of 76% and a negative operating margin of 3.6%. For a recap of full year 2025 results, please turn to slide 16. Revenue of $2.37 billion was down 3% year-over-year. Recall 2024 results included catch-up of previously constrained revenue that did not occur in 2025. As our business continues to evolve, we are introducing a new metric of annual recurring revenue, or ARR. For 2025, we ended the year with approximately $368 million of ARR. Profitability and cash generation performance were very strong in 2025, and we set several new annual records. They were gross margin of 37.7%, a just debit of $374 million, or 15.8% of revenue, non-gap earnings per share of $7.13 per share, and free cash flow of $383 million, or 16.2% of revenue. Turning to slide 17, I'll review liquidity and debt at the end of the fourth quarter. Total debt was $1.265 billion, and cash and equivalents were $1.02 billion. Our cash balance was down $312 million versus last quarter due to the acquisition of Urban for $325 million and $100 million of stock buyback, partially offset by Q4 free cash flow of $112 million. The previously announced $525 million acquisition of LocustView closed during the first quarter of 2026 and therefore is not reflected in this balance. As of December 31st, net leverage was 0.7 times. Please turn to slide 18 for our full year 2026 financial outlook. We anticipate 2026 revenue to be within a range of $2.35 to $2.45 billion. The midpoint of this range represents 1% growth versus 2025. We currently anticipate 2026 non-GAAP earnings per share to fall within a range of $5.75 to $6.25 per diluted share. The EPS outlook assumes an effective tax rate of 22% for the full year. Quarterly rates could fluctuate based on jurisdictional mix and the timing of tax settlements. At the midpoint of this EPS range, and after normalizing the tax rate to 22% for both years, we expect 2026 year-over-year earnings to be down by approximately $0.32, which is driven by our two recent acquisitions. Although we do not issue forward outlooks by segment, we are providing some information on the size of our two recent acquisitions, which will make up our new resiliency solution segment. In the full year 2026 range I just provided, we included a revenue contribution of approximately $65 to $70 million with gross margins of approximately 70% for this new segment. Resiliency Solutions is expected to be immediately accretive to ITRON's revenue growth, gross margins, and EBITDA, but will be dilutive to 2026 earnings per share due to less interest income given the $850 million we spent for the two companies. In the full-year outlook I just provided, the dilutive impact to earnings per share from the two acquisitions is approximately $0.38 per share. We expect the two acquisitions will be earnings per share accretive by the end of 2027. Now please turn to slide 19 for our first quarter outlook. We anticipate Q1 revenue to be within a range of $565 million to $575 million, down 6% versus Q1 of last year. We anticipate first quarter non-GAAP earnings per share to be within a range of $1.20 to $1.30 for diluted share, which at the midpoint is down approximately $0.27 versus last year. Lower interest income driven by the two acquisitions is reducing Q1 2026 earnings per share by approximately $0.13 per share. As Tom noted, the environment our customers operate in is evolving rapidly, which creates new opportunities, but also new challenges and complexity. Our teams are working collaboratively with our customers to keep up with the pace of change, and we are executing our strategy. Although our business will never move in a straight line in the short term, the future looks very bright, and we are confident in the course we are on. Now I'll turn the call back to Tom.

Thank you, Joan. Utilities today are no longer simply asset operators. They are real-time system managers balancing electrification, decentralization, affordability, and resilience. Grid transformation is structural, not cyclical, and it requires trusted data, secure networks, and operational intelligence embedded directly into the grid. This is where ITRON competes and ITRON wins. Our heritage is rooted in hardware and networks, and our future combines high-growth, durable, annual recurring revenue driven by data, AI, software, and services. Intelligence only matters when it is built on trusted data that is tightly integrated into operations. iTron provides that foundation, helping customers move from reaction to visibility, automation, and prediction. We remain focused on backlog quality, revenue growth, margin expansion, and cash generation. Our strategy delivers durable earnings growth and compound shareholder value through customer trust and solution relevance. Grid scaling and transformation is structurally unavoidable and cannot happen without greater intelligence. ITRON is the intelligent infrastructure provider of modern energy and water systems. We provide real-time intelligence our customers require to operate efficiently. With more than $1 billion of durable outcomes backlog, rapidly growing annual recurring revenue, and expanding solutions for critical customer problems, ITRON is well-positioned for the multi-year grid build-out in the years ahead. Thank you for joining our call today. Operator, please open the line for some questions.

Thank you. Ladies and gentlemen, to ask a question at this time, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 1-1 again. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Noah Kay with Oppenheimer. He'll end it now open.

Well, good morning. Thanks for taking the questions. I have a lot to get to, but I'll keep it to two in consideration of others. I think the key question here in terms of the market environment and the behavior you're seeing, Tom, is maybe to get an update on, you know, how utility demand and behavior are kind of trending now. You know, you talked in past quarters about, you know, some shifting dynamics in terms of how utilities go to market. But I guess to what extent are you seeing some of that stabilize or inflect here? Can you kind of give us an update on the pipeline and what KPIs you're really paying attention to to understand the shape of the demand environment from here?

Thanks, Noah. The fourth quarter bookings were strong, as we had expected, 737 million, and that's composed of several hundred unique wins. So the market is very constructive in moving forward. Second point I guess I would make is around some of the slips or the delays that we saw back in the middle of last year. We have not seen any further movement. Those things did move out of the year as we expected. But the externalities that really caused that, some of the froth around data center siting and government programs slipping out or funding being uncertain, that stuff has not continued on. It's still there on those individual projects, but it hasn't caused additional slips. So what we see today is bookings moving at a much more normalized pace. It's lumpy, but it's always lumpy, so call it normal. There's always some customer-specific phasing types of things inside of there. Relative to the metrics or the KPIs that you ask about there, I would say pipeline growth is certainly a key metric. That was up 27 percent from the end of 24 to the end of 25. We continue to see that pace thus far into 2026. We looked at outcomes backlog growth, which was up 58 percent year-over-year and now over a billion dollars. And certainly, we're really focused in on the stability of revenue and revenue growth for the future with ARR as the metric and the way to think about that. So, 368 million of ARR at the end of Q4, that's up 20 percent year over year from the end of 2024. So, there's a lot of really good stuff happening underneath all of that, and I would say the environment continues to be really constructive for us through fourth quarter and into 2026 and beyond. That is a segue into the

second question just on this ARR metric so just so we all understood this is this is an ARR run rate that you were at at the end of 4q so three hundred yes eight million yeah okay at the end of the school right and you know as we think about what the 2026 guide implies where do you think that could kind of be at the midpoint as we get into kind of the end of this year so you mean

specifically what does it mean for ARR? Yep. Yeah, I would expect we would still see kind of mid-teens to maybe up to 20% growth. And again, that would be calculated from year-end 25 to year-end 26. So that was a fourth quarter annualized note. Yeah. And that's organic, not including the acquisitions, right? Well, now it does include for 24, it just had a little bit of Locust, sorry, of Urban, but for the 26 expectations have both acquisitions in there.

Great. I'll turn it over. Thank you.

Thank you. Our next question coming from the lineup. Mark Strauss with JPMorgan, the Alanis Melvin. Mark, please check your mute button.

Oh, I'm so sorry. Can you hear me now?

Yes, we can hear you.

Yes, okay. I'm sorry about that. Good morning. Thank you for taking our questions. I wanted to You know, we've seen some investor concerns lately about AI disrupting kind of traditional software companies. I'm just curious, when you look at your resiliency solutions business and your outcomes business, can you just talk about kind of the barriers to entry and kind of at a high level what you see as your right to win within those markets? I have a quick follow-up. Thank you.

Both of the components inside of resiliency solutions, digital construction management, as well as the protection solutions that we have, both of those components really rely on field service tools and the usage of those tools. So when you have thousands and thousands of workers in the field using the tool to capture the data, you've got a really, really sticky solution overall. So I'll give you an example. The big winter storm that went across the United States, Winter Storm Fern, what was this, two weeks or so ago, really put ice and snow from Texas to Maine all the way across the U.S. What we saw was three and a half million hours of restoration usage of the solution that we have for emergency preparedness and response. That data capture, that field service use, those tools are incredibly, incredibly sticky. And when you look at it from the value that the customer gets, there's a really interesting clip of the CEO of Southern Company talking about the use of AI models to predict where to position crews and understand what weather patterns mean for their business, a really good example of how that tool, because of field use and the stickiness associated with it in terms of data capture, generates real value in terms of reduced restoration times and improved performance for communities and for our customers. So there's a perfect example as to why the tools that we have and why when we apply AI, It really comes down to how the data is captured, how it's processed, and making sure that the results are trusted, which our customers clearly do.

Great. Thanks, Tom. And then a quick follow-up, Joan. I appreciate the color with the resiliency solutions contribution in 2026 Guide. Just given it's a new segment, can you talk about kind of seasonality that we should expect in revenue and margins, if you don't mind?

Yeah, I don't see it as a seasonal business. I think it'll be pretty steady. And obviously, as they sign new contracts that have subscription-based revenue, you'll see it grow over time. But I don't see a big swing in one quarter versus another.

Thank you.

Thank you. Now, next question coming from the line of Davis-Sundedland with Baird, Yolanus Malpin.

Hey, good morning, guys. Thank you very much for taking my question. And lots of questions recently from investors just about utility ordering patterns and if it's structural disruption versus just, I guess, lots of wood to chop in the near term. And wondering specifically if you could talk about what you're seeing in the book and ship business trends, maybe how much is assumed for this year or how we think about the bookings needed throughout this year to set up and underpin your 2027 targets. And then I have one brief follow-up.

Yeah, I would say that the trends in terms of ordering patterns have really started to normalize some of the delays that we saw in the middle of last year, which were exogenous events that those have played through. We haven't seen any cancellations because of those types of things, maybe some project timelines stretching out, but I would consider it much more normalized today. On the book and ship business, we definitely continue to see good book and ship business as customers are coping with some of the environment that they operate in. Book and ship oftentimes tends to be a go-to tool that customers have to cope with uncertainty in their business model if they don't have the right things in place from a regulatory standpoint, for example. ability that we have to bridge our customers through a transition in terms of technology is really important. I referenced that in some of the prepared remarks of working with customers to smooth transitions of technology so they don't have to do a rip and replace but more find ways to grow the capability over time. So certainly in the electricity space, I would say book and ship alive and well. Water in the U.S. probably has slowed down a little bit. You've seen that in probably some of the competitive landscape that's out there, but that's probably a less important trend for us. Book and ship in Europe continues to operate on a normalized level. So again, overall market, very constructive in terms of what to

expect in the year ahead. That's super helpful, and thank you for that, Tom. Maybe just to follow up, I appreciate the commentary you gave qualitatively just about the distributed intelligence, some of the new offerings, the commentary from Southern, and kind of what you're seeing there from customers out there in the market, but wondering if you could give any more color just on penetration of these and maybe attach rates, which I know isn't a formal metric, but just thinking about core customers and adopting some of these new things, maybe the endpoints that you could see converted over, I guess, I don't know the timeframe, but just thinking about how this may trend in the near to longer term and the rate

of adoption specifically. Thank you very much. Yeah, the trend for DI adoption continues to be very good and very strong. So endpoints up 25% year over year, the number of apps up 70% year over year. So it continues absolutely at the pace we would have expected. We still have 10 million in backlog ready to move out the door approximately. So things are continuing to be normalized in that area. And if you happen to be at Distributech, a large show, you certainly would have seen the notion of grid edge intelligence everywhere across the industry. So this is an if. It's inevitable. It's absolutely happening. It's the way our customers need to cope with the world around them and the complexity of the environment that they operate in. We've seen particular growth in things like distributed energy resource management. So we're over 3 million devices, things like thermostats and load control switches and that sort of thing that are connected up. We're dispatching about 70 gigawatt hours a year in terms of activity, things like VPPs and other programs to manage it. We've seen tremendous growth in analytics as to how to make sense of all of the data. Those are the things that really do underpin the growth. And I think the right way to think about it from a financial perspective is ARR. There's lots of different models that our customers use to procure these types of solutions. And that's why we think ARR is a meaningful metric for the business and something to watch.

Super helpful. I'll pass it on. Thank you, Tom.

Our next question, coming from the line-up, Jeff Osman with TD Cohen, Yelan is now open.

Thank you. Just a couple quick ones on my side, Tom. Can you share what, when you typically start the year, what level of the forward guidance is usually in backlog, and then maybe how that

changed this year as you approached giving guidance? It will always be a bit varied, so it depends on the timeline that that you're looking at uh we we would go into the quarter with probably something on the order of of uh 80 percent in backlog and i would say that uh you know that we're we're not so far off of that in terms of what what's happening it clearly has has a tail to it so it's lower the further you go out in time but that's sort of the normal flow uh so uh as i mentioned in one of the questions earlier uh certainly the environment is leading to customers to have probably a slightly higher percentage of book and ship, and that is really what we're thinking about as we set guidance for the year. Got it. My last question is just,

I think you mentioned the pipeline that you're pursuing is up 27%. I was wondering a metric that you don't give, but just to give us a sense of are you gaining share or not, is can you articulate the relative to the backlog, which has regulatory approval, the sort of awarded technically contracts to ITRON, but not through the regulatory process, is that funnel or pool of awards, so to speak, larger than anticipated or past trends? Or like what's the general trend on sort of share gains and then you being technically awarded something and then still

working its way through that sort of regulatory process? Yeah, I think it's hard to judge that in any one moment of time. If you look at the trend over the last several years, yeah, I set definitely think you see our share trending up in the core markets that we are driving to participate in and the level of content that we have. If you focus in on the U.S. specifically and in the electricity space, I think that it's very fair to say the big are getting bigger and that the smaller are definitely getting squeezed and we being the largest are clearly a beneficiary

there. Got it. That's all I have. Thank you. Thank you. Our next question, coming from the lineup, Chip Moore with Roth Capital Partners. Helen is now open. Hey, good morning. Thanks for

taking the question. I wanted to ask another on sort of the normalization you're seeing on project activity. Just maybe, you know, understanding it's inherently lumpy, but Is there a way to help us think about, you know, if you didn't see those slips last year, you know, how we might be thinking about organic growth here in 2026? You know, sort of mid to high single digits, still the right way to think about that?

Yeah, I would take a step back and focus on the bigger picture. The business structure is fundamentally different now than what it used to be. we clearly still have a significant portion of our business, which is large project deployments and networking overall. And that absolutely has some level of lumpiness to it in terms of the bookings, how that flows through. It's generally over the next three to four years in terms of how it expresses itself for the revenue itself. But the piece of the business, which clearly is growing nicely for us. We continue to see good pace of growth, 20 percent year-over-year in outcomes, for example, in Q4, and the notion of annual recurring revenue that is most of resiliency solutions, a good portion of outcomes, and a sliver of the network's business falls into that category. That really is a significant structural difference in our business overall. So that's how I would focus on it and think about the business itself. We will continue to be beneficiaries of a market that is structurally, inevitably going to grow when it comes to grid deployment. There's just no way modern society will fulfill anything close to where the money is going in terms of data centers and reshoring and manufacturing and electrification of everything unless distribution spend continues at pace.

Very helpful, Tom. And I think, you know, you called out surging ARR right in the prepared remarks. Just, you know, help us think about, you know, where that could be going, you know, as we've had, as we get more normalization and, you know, perhaps changes in rate making dynamics, just, you know, where could outcomes, you know, how much has that been held back and where could that go?

Well, yeah, we certainly, what we saw in some of the network slowdown, I'm going back a couple of years now, when we had component constraints, the outcomes business will still grow and call it 10% year over year. As those components became available and we did fulfill that networking revenue, you saw outcomes growth rates pick up and certainly the 20% plus year every year in Q4 is good evidence of that. We're confident outcomes can continue to grow, and now we have a new leg in the stool with resiliency solutions, adding another tool in the toolbox to help our customers cope with some of the real challenges that are out there. If we are going to see grid deployment, you're going to have to figure out how to build this stuff faster, and that's where digital construction management helps. If you are going to have more floods and fires and storms, you're going to have to respond to disasters. And again, that's where a resiliency solution really helps. We can move it to a much more proactive environment, and that is absolutely going to benefit what our business can and will be in the future.

Maybe just one last follow-up to that, Tom, just on those new capabilities. Is there a way to, you know, help us think competitively? Is this helping you to, you know, land new proposals? Obviously, there's more TAM there. And then competitively, right, some of your competitors, I think, are backing down on some of the more complex deployments. Just a broader update.

Maybe take a perspective on the customer concentration specifically. iTron has 8,000 customers worldwide. Urban and Locust View, think of it as, you know, tens of customers each. So we clearly have the ability with the sales reach that we have to move those solutions into a broader landscape and really help our customers solve a different set of problems globally. The notion of how we're better together, one of the slides in the investor deck showed that circle diagram. But think about the ability to help your customer all the way through the asset lifecycle from when you're doing the planning to through the build process and into the operational piece. iTrump has traditionally known for a long period of time what's, quote, unquote, inside of pipes and wires. Now we know where pipes and wires are. so we can help with solutions for restoration and improve the overall offering. So those are the types of things that I think will continue to drive growth for our business and how we benefit compared to perhaps some of the other offerings that are out there. I feel really good about our competitive position and expect to be able to support our customers using it. Thanks very much.

Thank you. Our next question in queue coming from the lineup, Scott Graham with Seaport Research Partners. CLN is now open.

Hey, good morning and thanks for taking the question. Tom, I was wondering where you now believe the 20, where you land in the next couple of years in terms of revenues. And I think last time I asked you if maybe it was $2.6 to $2.8 million in 2027 as a revenue goal, that maybe the lower half of that made more sense. You know, your response, if I recall, was, you know, kind of maybe. Are you thinking, you know, more maybe that maybe the lower end of that range because of some of these scope reductions, the complexity, you know, deployment complexity reductions and what happened in 2025 is maybe is the lower end of the of the 27 goal more appropriate?

Thanks, Scott. I would say that it's really important to point out that gross margin, EBITDA, free cash flow for the 27 targets, we already achieved them in 2025, so we feel really good about that and we're sure we can continue forward on those types of metrics. On the revenue side of things, the 2027 revenue number, we still see that target as standing. Yeah, perhaps to your point, it'll depend on the pace of network deployments as to where we land in the range, probably towards the lower end. But it's just because we have achieved most of that 27 model by the time we got to the end of 2025, we think it's appropriate to reset long-term targets with an investor day. We haven't really picked a date yet, but I would suspect sometime in the next year or so, we will set up that and set out some new longer-term targets.

That's fair. I appreciate that. My follow-up question is really kind of around the bookings. I know you said that bookings were strong. They were down on a year-over-year basis. Obviously, you had the crazy fourth quarter year-ago comp. But on a full-year basis, they were still down versus the 2024 level by about 4%. So I was just sort of wondering when we can start to see bookings really inflect upward. And is it that it's another quarter or two away? Are you seeing things move through a pipeline like you did a year ago? If you could help us on that, that'd be great.

Sure, I think I've covered a lot of the points that are really important on this topic earlier on. So forgive me if I get a little bit repetitive, but pipeline growth being up dramatically, we think is a good signal of where things are really trending. The business is absolutely structurally changing with outcomes backlog now being above 1 billion and continuing to outpace the growth on some of the other businesses exactly as we had planned. Bookings will always be a little bit lumpy on the networking side of things just because of the nature of the business itself. But the environment we find ourselves in now is, I will say, normal lumpy rather than some of the exogenous things really starting to delay the overall profile. So we still feel really good about the trajectory of the business and how we will continue to support our customers. We have the solutions they need, and we are a trusted partner. So future continues to be bright. Thanks very much.

Thank you. Our next question coming from the lineup, Joseph Olsha with Guggenheim Partners. Healine is now open.

Hi, and thanks for taking my question. I only have one. Tom, you've talked about meet times for the business kind of marching out a bit. Historically, when you did disclose it more precisely, your 12-month backlog had been around kind of 35% or so of the total backlog. I'm wondering if you can give us some color on that currently.

The 12-month backlog is right around $1.6 billion right now. That'll be in the K when it is published. That's up meaningfully over where it was at the end of Q3, so I think it's roughly $150 or so million higher from the prior quarter. As I commented earlier, the business is structurally different now. we do expect book and ship is a bit higher during the interim period overall. So what I would say is it's very difficult to try to come up with a historical compare that's meaningful just because there's been so much noise in how things have flowed through from the COVID days to the post COVID supply constraints to where we are today. Our guidance absolutely reflects the best view that we have for uh for the year and we feel really good about the trajectory of the business

thank you thank you and i'm showing up for the questions in queue at this time i will now turn the call back over to mr tom dietrich for any closing remarks thank you lydia thank

you everyone for for joining and we look forward to updating you on the next call

ladies and gentlemen this concludes today's conference call thank you for your participation You may now disconnect.