Gorilla Technology Group Aktie

Thank you for standing by. This is the conference operator. Welcome to the Gorilla Technology Group, Inc. First Quarter 2026 Financial Results. [Operator Instructions] The conference is being recorded.

[Operator Instructions] Before we begin, we will read the forward-looking statement. Today's call includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and projections about future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially. Forward-looking statements often include terms such as expects, believes, plans, anticipates, may, should and similar expressions. For a discussion of important factors that could affect Gorilla's results, please refer to our filings with the SEC, including our most recent annual report on Form 20-F. Except as required by law, Gorilla undertakes no obligation to update or revise any forward-looking statements made on this call, whether as a result of new information, future events or otherwise.

I would now like to turn the conference over to Jay Chandan, Chairman and Chief Executive Officer; and Bruce Bower, Chief Financial Officer. Please go ahead.

Thank you very much. Thanks, everyone. Thanks for joining. Bruce and I are going to keep this very direct today. Q1 was not a very quiet quarter. For us, it was not an accounting quarter which was wrapped in a bow. It was one of those quarters where everyone smiles politely, Bruce and I read from a script, pretend that the world has changed because someone added AI to the script and the release. Also, I'm not going to be reading from a piece of paper today.

Now Q1 for me was the quarter where Gorilla moved from turnaround into scale. And scale is not always pretty in the first few innings. Anyone who's actually built a business and something meaningful knows that. You do not build the data center campus, you do not secure power, buy hardware, deploy GPUs, hire people, expand products and move into sovereign AI infrastructure without creating some noise in the P&L. If anyone expected a perfectly polished quarter while we are building the next version of this company, they may also believe that the British sunshine arrives on schedule. So a charming idea, rarely accurate.

Now let me start with the facts. We delivered USD 28.2 million of revenue, which is up 55% year-on-year. More importantly, we turned operating cash flow positive. Let that sink in. Net cash from operating activities was $6.6 million compared with the cash, more importantly, used in operating activities to about $10.7 million in Q1 of last year. Now this is a huge swing. It's a positive swing, about $17.3 million of improvement or 162% swing. Now on top of that, we ended the quarter with a little over $98.4 million of cash, which is up 373% year-on-year. Let me put that in plain simple English. Revenue grew, our customers paid us, operating cash flow turned positive. Cash stayed strong. On top of that, this is not just theory. This is not market theater. This is execution landing on the cash flow statement.

Now the reported operating loss of about $41.1 million, that number, you should stop reading there. If you stop reading there and if you look at the business, then you actually missed the business. The loss was heavily distorted by 2 major items. There was a $20.9 million stock compensation, which has been due for a better part of 3.5 years. We had to take that hit. Second, you've got a USD 18.9 million of foreign exchange losses. Together, combined, that's about 97-plus percent of reported operating loss.

Now excluding those items, the underlying operating loss of the entire company was only $1.2 million. Now that's real context. So no, it was not a $41 million reflection of the operating business. This was an accounting heavy quarter inside a company that grew revenue 55%, turned operating cash flow positive and ended up with nearly $100 million of cash. So that is why I say this quarter separates accounting noise from an operating reality.

Now the stock-based compensation charge is a noncash. It reflects a long overdue equity compensation linked with several years, which we have been discussing with the market. Now frankly, I would rather recognize the charge when our equity value is materially higher than issue it at stress levels or punish the shareholders. Now put it more simply, I would rather take the accounting medicine at around, let's say, $15 and hand out the company at $3. Now this is not arrogant. This is arithmetic.

The FX loss was painful. Nobody enjoys currency devaluation unless they have a very unusual weekend hobby. Now -- but again, look actually what happened underneath that accounting line. We collected cash. What people seem to be missing is that we've collected cash. Our customers paid us, Egypt paid us, milestones were achieved. All of our advanced payment. Let me repeat that again, all of our advanced payment guarantees associated with the project now have been completed and for every single project stage, we released and the project moved into a final implementation, which means we're successful. When naysayers came out and said you're not going to be able to deliver, we have now delivered. We're in the final stage of implementation. So yes, the FX [Technical Difficulty] the projects progressed, the guarantees have been reduced, and that is the operating story.

Now let us talk about what Gorilla is becoming, which is what we are all excited about. When we spoke to the analysts previously, Gorilla was still largely being viewed as a Security Intelligence, Network Intelligence, Smart City technology company. That business remains important. It is part of our DNA. It is who we are and who we were for the last 25 years. But the company is now moving into a much larger arena, AI infrastructure, GPU infrastructure, data centers, sovereign compute and secure national digital platform.

The transition costs money before it produces its full return. We're hiring people. We're buying hardware. We're securing land. We're progressing with power. We're taking colocation capacity. I think most of you have seen that press release come out in the last couple of days. We're investing in GPUs, networking, storage, cabling, security infrastructure, operational systems. Now we could have managed the quarter for optics. We chose to manage the business for scale. The easy thing would have been to protect in short term, the EPS, make sure that the right thing is to build the company, but that is most important for us to build this company.

Now personally, I do not believe PowerPoints run GPUs. Headlines do not cool data halls and definitely hope does not secure power for us. Most importantly, execution task. That is what we are doing. In India, we have signed contracts with Yotta and materially expanded our AI infrastructure collaboration. That program supports major infrastructure deployment and gives us credible foundation for significant revenue scale. And when I speak about Gorilla becoming a $500 million revenue business next year, I am not throwing darts at a wall after a long lunch, okay? I'm not drunk on my wine. I am looking at a signed demand, contracted opportunity and infrastructure required to deliver it. Now since then, people will say, Jay, you've been aggressive, fine, but I call it ambition with a calculation.

Now in Thailand, for example, we're advancing with our 200-megawatt AI data center campus in Korat. We have secured and acquired a strategic land. We've secured the foundation of the power planning. We are building the physical platform for Gorilla's AI infrastructure. But more importantly, it is an owned AI infrastructure strategy in Asia. Now Thailand is not just a concept. It's not just a mood for. It's land power, planning, water, dark fiber, cooling, security, a real development path. Anyone can say they are [Technical Difficulty]. Very few can assemble the infrastructure required to power.

We're also pursuing additional opportunities across Thailand, including Rayong. In Indonesia, I think [Technical Difficulty] you've seen, we have moved forward securing colocation facility in Jakarta and in Batam. Now across Southeast Asia, our goal is to combine own data centers, colocation facilities, GPU deployments and sovereign AI demand into one regional infrastructure platform. Personally, as Jay, I believe Gorilla has a credible path towards approximately over 500 megawatts of AI infrastructure capacity by the end of 2028. I'm not talking 5 years. If we execute properly, I can even go more. The demand is well north of a couple of gigawatts today. So we need to execute across Korat, whether it's Rayong, whether it's Bangkok whether it's Jakarta, Batam, Singapore, Malaysia, Philippines and other regional opportunities.

Now 0.5 gigawatt of potential AI infrastructure is not normal for a company of our current size. I've heard that before. Many have told me, Oh, you're too small, how are you going to build it? That is why this opportunity is actually so significant for a company of our size. And here is the most important point. We're not becoming a one-dimensional data center company. We have not stopped products. Raj, our Group CTO, he continues to develop platforms. He continues to deepen our Security Intelligence capabilities. He is continuing to expand our Network Intelligence portfolio and push our sovereign technology road map forward.

In Taiwan, we continue to pursue new customer opportunities. With Chelpis, for example, as you've seen a couple of weeks ago, we're advancing our quantum safety and security. With Astrikos in India, we're strengthening our intelligence layer that helps predict and optimize infrastructure across cooling, IT load and physical systems. That matters because the future of AI infrastructure will not be judged by how many GPUs I own and I can point to. It will be judged on whether the infrastructure is secure, resilient, sovereign, efficient and more importantly and most importantly, trusted.

Now compute without control for me is just expensive heat. Now Gorilla's advantage is that we are building the infrastructure layer and the intelligence layer together. We are also investing very heavily into people. A lot of people questioned us last year. And now I can tell you, over the last several months, we have added more than 100-plus employees and over 200-plus contractors across delivery, engineering, finance, compliance, operations, commercial functions, procurement and so on and so forth. That is not overhead for the sake of overhead. That's execution muscle.

No one and personally, Gorilla cannot deliver multibillion-dollar scale with a village hall committee and a lucky spreadsheet. No, that does not work. We're building the organization required for the next phase. So when you look at Q1, do not look at it as small quarterly miss against an old model. Look at it from the first visible quarter of a company that is going to be much larger and is being built. The old gorilla was about proving that we could turn around. The new gorilla is about proving we can scale.

We are raising our full year 2026 guidance to $160 million to $200 million. And I am personally focused on what it takes to build a profitable $500 million revenue business next year. That will require execution. It will require discipline. It will require capital. It will require delivery. And more importantly, it will require us to keep pushing across all of the markets in Middle East and Asia, along with other strategic locations. But the direction is very, very, very clear. Revenue is growing. Our customers are paying. I'm going to repeat that. Our customers are paying.

Operating cash flow is positive. Cash is strong. We are securing land. We're securing capacity. We're buying hardware. We are building data centers. We're developing new products. We're investing in people. We're building the capital platform to fund larger projects. That is not hype. That's not Jay spinning some BS; that's execution. And frankly, in an AI market where there are too many companies selling dreams before breakfast and explanations by dinner, personally, execution is becoming rather refreshing. So my message to the market is very simple. Gorilla is no longer proving that it survived. Gorilla is proving that it can build something far larger and bigger. The market can debate my narrative. Markets can enjoy the debate. It gives people something to do between the spreadsheets. But the cash flow statement has already started speaking.

So thank you. I will hand this over to Bruce, who will now walk you through the numbers in a way I counted to enjoy and now -- Bruce?

Thank you for that. I think Jay covered all of the highlights. I just wanted to zero in on a few of those highlights and then a few other numbers that stood out to me. So the first is, as Jay mentioned, revenue up 55% year-on-year. You can see from the full year guidance, $160 million to $200 million is the range compared to last year. So that shows we're already on track with our year-over-year forecast.

The other thing is that, that revenue is converting into operating cash flow. So we collected -- we collected invoices from 3 large customers in the first quarter. So that meant that overall net cash was $6.6 million. Subsequent to this quarter, we also got a release of all of the guarantees for our major project in Egypt. So basically, the free cash portion of the balance sheet is very strong and the restricted cash, which a year ago was a very large number, has come down to almost 0.

At the end of the quarter, we were $98.4 million of cash and cash equivalents. That shows, I think, that we have a fortress-like balance sheet, which is able to tackle the projects that we have enumerated. So in between the coax and then the expansion into the colocation facilities and in the projects at Yotta, et cetera, this is what gets us through the first stages.

We also -- the debt position continues to perform in the sense that it's continuing to dwindle. So we have $13.2 million of debt. So that leaves us with a very strong net cash position. And then the last thing I would say is when you look at the top line and the operating cash flow, obviously, the results, we're very excited about. But also we have invested, but a lot of this is operating leverage in the sense that the operating expense line, so in the financial results, it shows up as other operating expenses. That's basically the SG&A bill. It was only up 16% year-on-year. And that's because some of the major hires we made last year, some of the major steps up in the budget we made last year. So we're actually seeing those investments pay off. And then I think the second round of investments that we're making now into building out the infrastructure offering will soon pay off in a similar fashion.

The last thing I want to talk about was really -- so Jay mentioned some of the numbers about the FX losses and then the stock-based compensation. I would -- so there was a $1.1 million operating loss without those 2 big revaluations. I would note that basically, we carry large balances in 3 currencies in -- apart from U.S. dollars, obviously, in Taiwan dollars, in Thai baht and in EGP. And given geopolitical events in the first quarter, all of those had adverse movements. Taiwan, Egypt, and Thailand have all stabilized with currencies. So we shouldn't see a repeat of that magnitude.

Second is some of those exchange rate losses actually showed up in the operating figures because they had to do with the movement in the receivables value. So that, I think, masks the underlying profitability of the business. So in a stable exchange rate environment, what I'm saying is we should revert one without significant geopolitical upheaval, we should revert to a much more positive net income profile.

Then in terms of -- many people have asked us over the last couple of months, okay, you have all these projects. You've announced that you're going for project financing. What is the update? Without going into too much detail, which I think lenders would not like me to do is we are very happy with the progress. We have multiple term sheets that we have either received and are waiting to sign and go into documentation phase or we are in the documentation phase already. And then the next announcement about the project level financing will be one where we basically say it's closed, and this is the [indiscernible] project for the various projects that would be funded. So that is my update on the project financing, but we're very happy with how it's progressing, and it's comparing well with the assumptions that we had when we went in and signed the projects. So the profitability is there.

That's all for me. I'll turn it back over to Jay, and we can open up for questions.

Thank you, Bruce. Operator, we're happy to take the questions.

[Operator Instructions] Our first question comes from the line of Brian Kinstlinger with Alliance Global Partners.

This is [ Kevin ] for Brian. Could you talk about the planned time line for the variety of HPC AI deals you've announced during -- that you had announced, including the multiple phases, the 3, 3-year programs and the 200-megawatt campus in Thailand, as well as any others that I might be missing, particularly when each phase is expected to begin revenue generation?

Kevin, it's good to hear from you. Thank you. So we have started out our campus build-out in Korat. Let me start with that. So we have already started talking to the EPCs. We're looking at the water. We're looking at power. So our build-out should start somewhere around the third to fourth quarter this year. So that's when we will potentially start looking at pouring the concrete.

In terms of the other projects, so Yotta has already kicked off. We've already placed the orders with our OEM partner, Supermicro to our distributor in India. We are working through all of the customs, the government of India regulations and requirements for import, which is a very tedious task. That has kicked off already, and we are expecting our first delivery to come in at the end of July. We've already got the confirmation from our very close partner, Supermicro, who've basically given us the first delivery schedule. The second Yotta phase, which is the much larger project, that is expected to be delivered end of August. And subsequent to that, every month we are having -- up until November, we're going to complete all the delivery. So if you look at the revenues hitting our books, you will see the first phase revenues hit our books from September. Then going on for the second phase would be from October, November, and December.

In Asia, which you talked about, that was your first question. We are -- as you know, we've just signed up the colocation facility with NeutraDC over the last couple of weeks. That revenue is expected to hit our books from the mid of third quarter or the fourth quarter of this year because, again, we have the data center, we have the power and all that fully connected. We have now confirmed the full design architecture with the customer. We are working with our -- again, our partner, Supermicro to get the delivery schedule. And as of now, the delivery schedule looks like something between August and September. So we will keep the market updated as and when we evolve with our time lines. I hope that answers your question.

The next question comes from the line of Mike Latimore with Northland Capital Markets.

Congrats on the first quarter results. Your cash flow looks great. I guess you raised the lower end of your guidance from the start of the year, it was $137 million to $160 million. Maybe what was the main factor behind that?

Bruce, do you want to take that?

Yes, sure. So as you know, how we forecast guidance is we take what is contracted. So we don't just stick our finger in the wind and think about all the pipeline looks like this and this projected conversion and hope for the best. So we feel confident in 2 things. The first is that the time line, as Jay just mentioned, are looking very good for us to deliver above what was the previous low end of the range, $137 million. And then the second thing is that the second quarter and the third quarter are shaping up with more contracted revenue than we were originally planning on. So in between -- so by the end of the third quarter, I think we'll come out in a better place than we originally assumed. So those 2 factors led us to think, okay, the bottom end of this range needs to move up.

Then the $200 million is still being ultra conservative. You heard, for instance, that one of the phases would be October, November delivery. If there's any hiccups and it falls into the next year, I don't want to include that in our guidance for this year and then have egg on my face, right? It's much better to be conservative to the market, under promise but to be transparent. And then as things become 99% certain, then we will adjust the guidance as appropriate. Jay, anything I missed?

No, I think you hit the nail on the head. Mike, good to hear from you again. Again, we are working very, very closely. As you can imagine, a lot of the global political environment in terms of deliveries and all that have also been a bit of a challenge. We are making sure that we're getting the right attention at the highest level at NVIDIA, making sure that we get it over with -- through Charles, who's at Supermicro is the Co-Founder of Supermicro and make sure that we are able to get all the deliveries sent over to us. Now the good thing about India is that we've already gotten the delivery schedules, and that's why we upped the lower end of the guidance. Once we get through the hurdles of over the next few days or weeks, we will come back to you with a more concrete, maybe an upgrade for the upper end of the numbers.

At that $200 million level, how much of that would be in the kind of AI, data center, digital infrastructure category?

Roughly around 60% to 70%. Our core business will continue to grow, but this AI is new, so we're going from 0% to almost 150% of that in terms of revenue. So yes, that's going to be where we are.

Then on the Egypt deal, you're at full implementation. Is there a recurring revenue that continues now?

Yes. So we have a 5-year recurring revenue, as we mentioned to the market about 3 years ago, post the completion. So we are looking to complete sometime mid to third quarter of next year. We're in the final implementation stage. As I've mentioned earlier, we've gone through the motions. We've done all the deliveries. Customers have been super happy. One thing I want to mention here is that we now have nil, near nil advanced payment guarantees on any projects. All our projects have been delivered successfully. The total advanced payments, I mean, as you know, 3 years ago, our advanced payments were well north of $50 million, $60 million being held hostage by our customers, which is obviously very important for them. So we can prove we're delivering. Today, it's $45,000. I just want to make that statement very clear. So it means we have delivered, customers have paid us.

That's great. And then just last for me on the gross margin. How should we think about gross margin for the year?

Yes. So last year's gross margins were in the low 30s. Given the growth in the AI-focused business, the margins will expand. The gross margins on the data center GPU-as-a-Service implementation are sort of 75% to 80% in a bad case and can be even higher. So that will drive the gross margins up for the full year. In this quarter, we saw a lower gross margin than we'd like given the mix were basically skewed a little bit towards more hardware. And then frankly, we are a little more aggressive on the pricing just to get an extra customer across the line. But overall, we've announced the contracts that will form the growth phase for quarter 2 to Q4, and the margins on those are much higher than the traditional business, the gross margins at least. So we expect them to move higher. When Jay alluded to a guidance update, when we update the guidance, we'll have a firmer picture with a pretty tight range on what that will be.

If I may add to -- Mike, my apologies. If I may add to that, right, just a quick point. See, we -- personally, for Bruce and I, this was like a mobilization quarter, okay? We've been front-loading the costs. As you see, we have hired people, tons of people, new people for a company of our size. Infrastructure readiness. We've been buying hardware. We have to run POCs. We have data center capacity, which we have to pay for. You don't sign data center capacity by not paying. You have to pay a significant amount in advance. Then project delivery and technical deployment. So these are the costs which have kind of come in into the Q1.

Now most importantly, Mike, we're also building our capacity before the full revenue curve lands, right? That means the concept here first, but the gross margin recovery follows as the utilization increases. You've been in the space for so long, you understand data centers better than most people. The AI infrastructure for us does not scale for free. So more importantly, we're making sure that the platform is up, running, getting ready, steady. We're giving our 99.999% SLAs to our customers and making sure that all of our GPU deployments, our data center revenue, our managed revenues are all improving materially over a period of time. That was just to add to Bruce's point.

The next question comes from the line of Bharath Nagaraj with Cantor Fitzgerald.

I think you mentioned 100 new people were hired and 200 new contractors. I guess that will only be partly reflected or maybe I think Bruce was mentioning maybe fully reflected in Q1 and you're continuing to hire more. So just wondering how much should we expect operating expenses to increase by in the coming quarters? And basically, that ties into any comments on where the EBITDA target should be for the coming quarters in the year? That's the first question.

Bruce, if you want to take the first half, I'll take the second half for that.

Sure. So I think we mentioned that they were hired as contractors. So that's one of the reasons why the gross margin is depressed because a lot of the contractors would appear as project level costs, not as SG&A. In terms of SG&A, it was a little over $7 million in the first quarter. It's going to expand in subsequent quarters. We'll continue to build scale operationally. But it won't -- first of all, it won't expand as quickly as the revenue will. And then also given that we're adding higher gross margin business, there should be expansion in gross margin and it flows through to EBITDA margin. So last year, we saw at the end of the year, $101 million of sales and then $20 million of adjusted EBITDA or $19.5 million of adjusted EBITDA. So I would expect it will expand beyond that margin to 25%, 30% plus. I'm going to -- we'll give the exact when we have the final numbers.

Yes. And just to add to that for the second half, I mean, I think the market also needs to understand the number of people we're hiring is not enough. This will expand by another 5x or maybe even 10x more, both on the full-time side and the contractors. Let me explain one, right? Today, we bid these contractors, this is because they're sitting together, putting all these infrastructure in play and so on and so forth. But look at the execution side of it. We need people on delivery and program execution, which we'll be hiring. We'll look at engineering and infrastructure build-out. We'll be doing data center operations. I mean, just to build a single data hall, we would need roughly around 300-plus people, right, on an average, each person working, let's say, 60 people working in a shift, that's 180 people, including everything else, you're looking at about 300 people per data center operation. You've got your GPU deployment, you've got your technical enablement. You've got your product development. You've got your SOC, NOC and managed services. Then you have your finance, compliance, procurement and project controls, export controls. We have to have a separate legal team for all the export controls with the U.S. government and NVIDIA and which we have to support. And then finally, we have to have our commercial support and what I call as our customer success.

Now again, Bharath, we are not collecting these employees like stamps, okay? We're moving from a lean turnaround business into a scale execution. So the mobilization on Q1 and Q2 should be understood as hiring directly into what I call backlog execution. We're not hiring and waiting for new projects to come. We've already signed these projects. We're looking at about roughly -- we've got $3.2 billion coming from the year projects. We've got another $2 billion of signed contracts. So you're looking at about $5-plus billion of backlog execution.

Number two, Korat data center build-out, that's going to be at least another 1,000 to 2,000 people. The India GPU infrastructure, which is running up and running. We have the team from India sitting here today in Asia, in Southeast Asia with us, and we are building all of our infrastructure teams and so on and so forth. Then you've got your Southeast Asia colocation capacity. We have outsourced most of that work to our friends at NeutraDC. But then you've got your security, network intelligence and so on and so forth. So we are building what I call 0.5 gigawatt of ambition. And fortunately, that is going well in our favor today.

That's very helpful color. Just a quick couple of follow-ups. In terms of the capacity of data center capacity or AI capacity you want to be installing by the end of this year, I think you mentioned 60% to 70% at the upper end of your guidance is to come from that. But in terms of the capacity, what's it going to be? I think it was historically around 100 megawatts, maybe that was at the lower end. So I just wanted to clarify what that number is for 2026? Because I think 2028, you have mentioned 500 megawatts.

That's a really, really good question, Bharath. So we are aiming at anything between 100 to 150 megawatts by the end of this year. By end of 2027, my personal ambition is to complete the full 500 megawatts we've already received inbound interest on a number of other land sites and government approaches on -- from various different parts of Asia. We received inward requests in terms of how we can build up scale to about 2 gigawatts as well. These are conversations we're having right now as we speak. But my personal ambition, like I said, end of 2027, I want to have at least 0.5 gigawatts of power capacity with a view that I've signed another gigawatt -- another gigawatt of -- full gigawatt of development capacity as well.

Super. Just one -- sorry, actually, I have a couple more, if that's all right. Just on the -- you have obviously, a lot of competing demands for GPU. How confident are you that these -- all the GPUs for all these projects can be delivered given the supply chain issues? I mean, there's a lot of orders that you have won. Pipeline is pretty significant. And hence, I was wondering around that.

Yes. Well, listen, if I had a magic wand and I was looking into my crystal glass, I would love to tell you that I can have all this delivered by the end of this year, and I'll be significantly pumping up revenues next year, but it takes time. NVIDIA is releasing a lot of -- I mean, if you look at NVIDIA's release now, you're looking at the next generation of Vera Rubin also coming out. Customers are now keen to look at that as well and potentially talk to us about it. But that changes the entire goalpost as well sometimes. So we're making sure that the customers' architectures don't change. So we have to make sure that the customers are grounded, right? There's a nice shiny object out there. Customers want to run towards it. So we've got to keep them grounded.

Now on the delivery side, fortunately, we have not had any major issues at all in terms of NVIDIA to date. The global concerns or issues today, which are like a nose around my neck, don't seem to be having created a major problem yet. But what has created some level of delay is the current lack of availability of memory and storage in the market. And compounded now, we are also seeing shortages in CPU availability in the market. So we are working with our partners. So we are very, very, very closely integrated with Supermicro right now. We're working day in and day out. In fact, I was there the whole of the week before with them. We're spending the next full week at Computex as well in Taiwan, where we are sitting together and making our plans as to how we make sure that the memory does not -- I mean, getting the GPUs is great, but our capacity needs to increase, right? So we are working hand in glove with every single major partner of ours across the region to make sure that it does not falter.

One small and minor accounting question. On the SBC costs, am I right in saying that given you recognized most of what you had said you would in Q1 itself, the remaining quarter should be minimal. Is that right? Or am I getting that wrong?

Bruce?

Yes, I think that's correct. I mean, there was some -- there was deferred stock-based compensation, and it's been out there for a couple of years. And for various reasons, we decided to pay in this quarter. So it takes no longer an overhang.

Bharath, if I may add to that, and this is not me being funny. I've seen comments like, oh, my God, CEO has gotten paid and blah, blah, blah. No, this is not just the CEO. This was for the employees as well and everybody else around the company. I want to make sure that the compensation, the market understands that the compensation was due for the last, what, nearly 4 years now since the company went public. And employees need to be paid. They need to be given their stock. Unfortunately, it had to come in this quarter. That's okay. If I don't pay my employees, that's the wrong thing for me to do. So I'm setting the right precedents.

The next question comes from the line of John Roy with Water Tower Research.

So Jay, obviously, there's been a lot of talk about much larger and larger projects, AI infrastructure, GPUs, data centers, et cetera. I was curious, I know Bruce talked a little bit about funding just to your maybe philosophy about how are you going to fund these massive projects? And where do you stand on that? Maybe just give a step back and tell us where you're at.

John, good to hear from you. I was wondering when you would ask me a question. That's a very fair question, and frankly, it is the right question. The scale of Gorilla has changed, right? You and I know we talk regularly. We're not talking about small software deployments. We're signing and pursuing large AI infrastructure, GPU data center projects across India, Thailand, Indonesia, Malaysia, Singapore, Philippines and so on and so forth. That requires capital. And there's no version of my story or this story today where we signed multibillion-dollar opportunities to buy GPUs, reserve data center capacity, procure networking, memory. I was just telling Bharath about it, memory and storage, secure power, buying land, building data centers without funding the business properly, right? I mean, GPUs take money. I mean, I don't know if people realize buying a B300 server costs me more than $0.5 million. That's excluding networking and all the other hoopla that goes with it.

So when a customer tells me that I need 1,000 servers, you're looking at about $500-plus million of investment just on the GPUs on the servers. And then you've got networking and so on and so forth, which costs you another $20 million to $25 million. It's a pretty penny. On top of that -- so where are we today? We have not yet relied on dilutive equity to fund the build-out today. Our approach has been to protect shareholders while building the capital stack required for our particular club, okay? We are actively working on vendor financing. We have received term sheets in the range of approximately $0.5 billion to $1 billion across all of the vendor financing and debt structures. We are progressing with various debt financing. We have term sheets and bank-led proposals between $300 million to more than $700 million, $800 million that contemplate lending at the project or the SPV level rather than relying purely on the listed path. You remember what Bruce said last quarter, we're making sure it's a nonrecourse. And I think people need to understand when Bruce meant that, he meant that for real.

So we're also looking at different levels of SPV structures. Now that is important because infrastructure assets could be financed against their own cash flows, the contracts, equipment and the project economics where possible. So we are working with various levels of structures at the SPV level. We're also building Gorilla Capital. Again, the market seems to have forgotten about it because it's what I call a strategic funding platform. The goal is to bring long-duration capital, including pension funds, endowments -- sorry, institutional investors with structures that can support a 7- to 10-year long-life infrastructure asset investment.

Now we're matching funding to the asset. GPUs, data centers -- sorry, and contracted infrastructure revenue should not be financed with short-term thinking. Now the capital structure has to match the commercial life of the assets. More importantly, we're also being very disciplined on shareholder impact. We will not do financing simply for the sake of financing. The objective is to make sure that there is growth, profitability and shareholder value. So what the market needs to understand -- I have no idea what's happening to me, sorry. I apologize. We're looking at potentially more than $5 billion of signed contracts and executable opportunity across our AI infrastructure and data pipeline -- data center pipeline. The market knows about this already.

If we want to move Gorilla from a $100 million revenue business last year to $500 million revenue next year plus annualized business for the next 5 years, then the business has to be funded like a Sirius infrastructure platform. So growth requires capital, and more importantly, profitable growth requires very disciplined capital. So that's why we're not raising money because the business is weak. I think the market needs to understand this, John. We're not raising money because the business is weak. We're assembling capital because the opportunity is much, much, much larger ahead of us. And the difference is very simple.

My message to you and to the entire market and to all the people listening to this call is we're funding growth through a variety of vendor financing, SPV level financing, long-term --long-duration institutional capital. But we're doing it very carefully to protect our shareholders, keeping them in mind at every single time. I hope that answers your question.

Yes, it does, actually. It kind of brings up a corollary question, which is the pipeline. Can you give us any kind of color on the pipeline? I know there's some big numbers out there. Just curious if maybe you could summarize it with some...

Sure. So today, the pipeline -- the signed contracts or I would go into say backlog is well over $5 billion, okay? The pipeline to be signed or in negotiations and discussions is well north of another $5-plus billion. That's excluding any of the build-out we're doing currently in Korat or in Rayong and so on and so forth. So -- and when I mentioned this previously to Bharath, I made this very clear to him that we are looking -- my personal ambition would be to get a full gigawatt in there. If I get the full gigawatt with offtakers -- and by the way, just FYI, we do not sign any colo. We're not purchasing any land without an offtaker. I have signed offtakers completely ready to take over the capacity day 1. It's not a single hour. I will spend on GPU power without having an offtaker. So our revenue will hit the books as soon as the date opens when the ribbons have been cut. So if we do the 1 gigawatt, then you're looking at -- you know what the revenues are. I'm not going to prompt any numbers right now, but we will look at a significant upgrade from even the $500 million plus number.

[Operator Instructions] The next question comes from the line of Barrett Boone with RedChip.

Jay, Bruce, congratulations on the strong start to 2026. As discussed earlier in the call, receivables came down meaningfully during the quarter. Can you talk about what's driving the better collections? And how we should think going forward about cash conversion as we scale towards the $500 million revenue target?

I'm happy for Bruce to start, and then I can chip in. Bruce?

Sure. So what's driving it is really we have 3 core customers, which we disclosed in the 20-F. And we delivered over the course of 2025, we invoiced and then in 2026, we said these are terms, make sure that we collect. So 2 of them have always been extremely prompt payers, and that's the kind of customer we like. And then in the third one, it's really just a simple logic, commercial logic where we say, look, in Egypt, we've been working together since July 2023 when we were awarded the contract. We've come this far. We've done this much for you. Is it too much to ask that you pay on time and the customer is -- recognizes the value and then the core nature of the infrastructure that we've built. So that is helping and just the sticky nature of our product. And then the thing I would say is that with new customers, we're extremely vigilant about the payment terms for who we -- new customers that we're onboarding. Jay?

Absolutely. Thanks, Barrett. Bruce, that was actually quite interesting. You stole everything from me already. So just to add to it, Barrett, personally, revenue is wonderful. Of course, everyone likes revenue. But cash is what separates the business from being a brochure, okay? We produced operating cash flow. As you know, you know the numbers, I'm not going to repeat it. There was a huge swing, positive $6.6 million and so on -- a $1 million and so on. But more importantly, what drove it? I think, again, I think we need to educate the market. First, our customers paid us. That may sound very obvious. But when you look at large infrastructure projects, payment behavior is one of the clearest signals of delivery quality. It shows quality of the company. Customers do not release meaningful cash because they're feeling charitable, okay? They release cash because milestones are being met, documentation is being accepted and projects are moving forward.

The second part is that we've also tightened our project discipline. We're no longer a $20 million revenue company. We're being more aggressive internally and invoicing, collections, milestone tracking, project governance, all of that customer acceptance. It is not enough to win large programs, but we must convert that into recognized revenue and subsequently into cash. So the difficulty is that we want to make sure that we are running the business profitably.

The third most important part of the business is -- now that we're building the business where cash conversion is becoming part of the operating model, but not an off the top. What matters next is scale. Now if we are being serious about moving towards our $500 million of revenue, then we cannot allow working capital to become for me, a museum of unpaid invoices. We need disciplined contracting, delivery, acceptance, billing, collections, cash application and so on and so forth.

So as we scale Barrett into data centers and GPU, cash flow will always not move in a perfectly straight line. I wish it did, but these are all large programs. So we're going to make sure that we are going to stick to our guns on every single month. But the Q1 signal is very important. We grew revenues. We reduced our receivables. We reduced our advanced payment guarantees. I just mentioned this earlier to Mani. It's gone down from $50-plus million to $45,000. That's talking about next phase of our business evolution. So the simple answer is, as we scale forward, cash conversion will become key -- it will become the most key metric for us, which personally, Bruce and I are watching and will continue to watch like a hawk. Revenue gets attention, but cash earns respect for me. So for me, cash will be our standing ovation going forward, Barrett.

Understood. I just had one last question. Actually, about today's release, you do cite that the combination of infrastructure and AI products gives Gorilla leverage. Can you talk about how everything sort of works together and how these products help you win infrastructure deals that perhaps a pure-play data center competitor couldn't?

That's actually a really good question. I think, again, markets and many, many investor seems have also missed this. The simple point is, Barrett, we're actually not just selling space, power and cooling. A pure-play data center operator will give you building, they'll give you racks, they'll give you power, service desk, useful, but it's not stuff of Shakespeare, okay? I'm just using a British chronology here. Why? Because Gorilla brings the full operating layer around the infrastructure. Think about it this way, site assessment, power planning, cooling infrastructure and architecture, feasibility studies, data center readiness, all that is being done by us. Racking, stacking, cabling, GPU commissioning, network integration, cloud enablement, that's also being done by us. When you look at security, whether it's physical security, access control, cybersecurity, your SOC capabilities, your NOC monitoring, CCTV, access controls, we build and manage everything ourselves. We also operate it. That means we have a 24/7 monitoring, managed services, remote operations, preventative maintenance, life cycle support, all of that.

So for us, we're not just providing a room with very, very lovely blinking light. We are making sure that our products are sitting in it. And that's why we invested into Astrikos, right? Look at the difference. We have security intelligence products, which actually help customers protect their critical infrastructure, their endpoints, their users, their cameras, their operational networks. We've got the network intelligence products coming in from our friends at Astrikos. We have built our own SD-WAN, secure tunneling, orchestration and edge connectivity for products. Our business intelligence layer talks about all of our operational data, our infrastructure data, our video, IoT analytics and actual decisions.

So when we sit with a government, telecom operator or enterprise and any infrastructure partner per se, right, we're not saying here is a building, good luck. That's not us. That's not a strategy. That's a real estate with electricity, okay? It puts Gorilla in a much stronger position than a pure data center competitors. So with Gorilla, it gives them capacity plus control. So look at it this way, customers care about sovereignty, what is it, security, latency, compliance and so on and so forth. They don't have 12 vendors doing this. Typically, when you go into a data center, you've got 10 to 12 vendors doing this. We are there for the one throat to choke when something goes wrong. This is very, very, very important.

Now our model also gives us leverage. It gives us scale. It creates differentiation. It also creates what is called as the Gorilla edge, right, all pun intended. Because if you look at the full stack model across design, development, deployment and operations and so on and so forth, we're sitting right at the top of it. So if you look at a pure data center, think about it as someone giving you a garage. But more importantly, Gorilla gives you the garage. It provides you the engine, it provides you the security system. It provides you the control room and someone who's awake at, let's say, 3:00 a.m., like I was awake at 2:00 a.m. this morning, when things actually matter, Barrett. I hope that answers your question.

That concludes the question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you very much, Pamela. I really appreciate it. Analysts, investors and employees listening to my conversation today, thank you very much for your support. I would want to leave our investors with this thought. We have rebuilt the business. We've proved the technology. We've collected cash. We've turned operating cash flow positive and are now moving into a much larger arena, AI infrastructure. We've always been an AI infrastructure company, okay? We've been building the blocks. If you hear me what I said in my first interview on the NASDAQ in July of 2022, I said we were moving into building an AI infrastructure platform as a Service. That's exactly what we're doing. Data center is a part of it. It's not a pivot. So please do not use that word. We're not pivoting. We are building the platform, and we're going to close and secure the platform. We're building GPU capacity. We're building sovereign compute, and we're making sure that national platforms function. We're buying land. We're securing power. We're taking data center capacity. We're building new products. We're hiring new people, more people needed to deliver. So we're not talking about scale from a distance, we're actually building it.

So my message to the market is very simple. Judge us on execution, judge us on cash, judge us on delivery and judge us on whether we keep scaling. Everything else for me is commentary. And frankly, there's been plenty of commentary from people who are just sitting on the sidelines, and these people are not even able to build a sandwich, let alone an AI infrastructure business. So Gorilla is not only getting started. The market can doubt the story if it wants, but it cannot ignore our direction of travel.

Thank you very much for listening in. Have a lovely evening.

Thank you. And this concludes today's conference call. You may now disconnect.

Welcome to today's fireside chat with Gorilla Technology. I'm John Roy. I cover technology here at Water Tower Research. And today, I'm joined by Jay Chandan, he's the CEO; and Bruce Bower, the CFO.

I should mention that Gorilla's safe harbor statements can be found on their website. This fireside chat may not be reproduced or written transcript distributed without the expressed written consent of Water Tower Research.

Jay and Bruce, welcome, guys. How are you doing?

John, absolutely fantastic. Thank you very much indeed. How are you?

I'm doing well actually.

So Jay, obviously, you made the Yotta announcement. Can you give us some of the color and insights as to what is in that announcement? And what does it mean?

Absolutely. The first takeaway, John, is quite simple. It's a moment where I believe, and Bruce, of course, we both believe that Gorilla has moved away from just being an AI company to an AI infrastructure company. Think about it from -- moving from PowerPoint to [ Power ], okay? For a long time, the AI market has been full of brand speeches. We've been looking at all of this glossy gags, you're looking at people. We're using the word transformational like confetti at a wedding. So for me, that's not what it is.

Yotta is not about a pilot program. This is where real infrastructure, real GPUs, real deployment, but more importantly, real revenues. Now the initial Yotta deployment is about 640 for high-performance servers, and this is representing roughly around 5,000-plus GPUs. But if you look at this, what Gorilla is doing, it's moving from what we call the base case of reality to actually what really matters into what we can prove going forward. And that has already been what we call scaled up by the second contract we signed with Yotta, which we also made an announcement. That covers an additional roughly around 20,736 GPUs.

These are B300 GPU cards, which will be the largest AI cluster within the region. And as you know, NVIDIA has taken 1/2 of the offtake agreement with Yotta. And all these have to be delivered by 30th of September this year. So, the total aggregate value of that second phase is roughly around $2.7 billion, $2.8 billion, net-net, putting about 225,000 GPUs with roughly around $3.2 billion, $3.3 billion of announced commercial values for the Yotta framework. Now for me, personally, that's not just a press release, that's intent.

Now the second takeaway for us is India. Now India is not just a big market. India is one of the most important AI infrastructure markets on the planet after U.S., China, it's -- I mean, you're talking about 1.6 billion people with roughly around 1 billion-plus people using the Internet, roughly around 22.5 billion, 22.6 billion UPI transactions just last month alone. So you're not talking about a population story anymore. It's about a digitized population which loves data. And who loves data, AI does, right?

Data needs compute. Compute needs power, they need cooling, they need racks, they need networking, they need security, and more importantly, people who can actually deliver the whole thing without turning this into a very expensive, what I call, glamorous bunch of radiators. So that's where we come in. We -- as you know, we actually have teams in Taiwan. We have a big data center team now in Thailand, India, U.K. and in Egypt. So we're bringing all of these together to create a global deployment team.

The third one, which we are seeing is very important, which is the sovereign AI part of it. This is not just about compute -- the companies wanting compute. This is about nations where we are seeing countries like India decide that their data, all of their models, all of their citizen services like the Aadhaar Card and so on and so forth, their financial services and all of the critical infrastructure just cannot be sitting somewhere else because it is convenient, right?

If India is building its own compute, as you know, they've gone from 38,000 high-performance GPUs, they'll be adding another 20,000 GPUs. We're also getting significant demand requests from India and the Indian government where we're seeing another 30,000, 40,000, 50,000 GPUs on top of what we've already built. So that tells you the direction of travel. It tells me that India is not just dabbling into it. They're investing billions so that they can be competitive.

And finally, the most important thing is Yotta. Now Yotta is a phenomenal partner for us. It's not just like a local partner who just wakes up at morning and says, "Look, I've got a few racks in there and you've got a wave of flag, and thank you, we've declared victory." When somebody actually goes and sees the Yotta data centers, they will understand how serious these guys are. I'm talking about data centers that are 14 stories high.

Personally, I have not seen anything of that scale today. So what they bring is they bring discipline, they bring the cooling, they need to bring all the customer access. More importantly, we've created a relationship of trust, finally. So all that, including our commercial execution, it's not just about performance, it's not just about a supplier relationship, it's about scale. So for me, the bigger message for your question, sorry, it's turning out to be a long response.

It's about Gorilla becoming the picks and shovel company of the AI revolution, right? Soup to nut, the one throat to choke, as you said. Everybody wants to talk about AI, everybody wants GPUs, everybody talks about networks. For me, what Gorilla is building along with Yotta is, it does 3 things, which shows that the demand is real. It shows that India is enormous and Asia is growing as a banner.

Third, Gorilla can execute at scale. We're not talking about smaller deployments of GPUs. So we are going to be banging our chests or beating our chest hard. We're going to make sure that those machines switch on. We're not just going to live on hope. But more importantly, I think this is where, for us, the fun begins. It's exciting.

Wow, that's a whole lot going on. So Bruce, how do you corral all this stuff to really focus on profitability and improve the balance sheet?

Well, the improvement in the balance sheet has been an ongoing focus for the company. So, at the end of 2024, we had about $21.5 million of debt. As of the end of the first quarter, it's down to $13.2 million. So it's been a very disciplined, sustained reduction. We didn't just go pay it off willy-nilly. It was basically when it came up for renewal or we didn't need it, we paid it down.

And in so doing, we freed up restricted cash that was held against the debt. So basically, we had debt. We had to post collateral. The collateral was restricted deposit. So we pay off the debt, release the restricted cash. So net-net, it was very little unrestricted or free cash that was moving out to pay this debt down. And then we've also been disciplined in terms of reducing restricted cash balances. So just last week, we had an extra $5 million released. So, we're feeling very comfortable about the reduction in restricted deposits and debt.

The cash that we have is about $90 million as of today on the balance sheet, and this is really with one goal. It's to fund all of the ambitious project pipeline that we have identified. So, I think the way we think about it is 2 ways. First is that there's plenty of cash for growth and then to take the steps that we need. So for instance, putting down deposits to place orders for equipment, et cetera, and also having a reserve so that there's plenty of runway for SG&A and everything else in the meantime.

The other thing I would say is that profitability, well, all the projects that we're talking about, the new ones that we've signed up that we're implementing will be a boom to profitability. The sort of historical margin profile [ is between ] 30% to 45%. The exact kind of gross margin depends on the data center focused projects, but it's higher than the previous. So each of these new projects, when we implement them, improves the overall mix, and it's going to lead to improving margins, both gross margin level and then EBITDA level. So we're excited about the outlook for revenue growth. We're excited about the outlook for profitability and margins overall and also for cash generation going forward.

And then the last thing I would say is that, as always, our focus remains on finding the funding where it doesn't stress the parent company balance sheet. So for many of the projects where we can, we're getting project level financing. So that means debt or, in some cases, non-recourse and non-debt financing at the project level. And then also where we're looking for additional funding, it would be -- we're looking at debt and nondilutive financing at the parent company level as well.

And then I think Jay can talk about Gorilla Tech Capital and what that means as well.

Excellent. So we've talked about some of the recent future outlook. We've talked about controlling costs and getting the profitability better and that's stupendous. So Jay, give us an update of where you are on the progress? And how are you on the global rollout? I mean there's a lot of countries you've mentioned, but what's the progress?

Yes. John, I mean, you've covered us for a long time now, right? I think we've grown old together. So 3 years ago, Gorilla was largely seen as a strong technology company or a technology company with one market. Today, we're becoming a serious AI infrastructure player across not just Asia, Middle East, North Africa and even in Europe. That shift did not happen by accident. It was very deliberate.

The decision we made was deliberate because we decided we're not going to simply sit in one corner of the world, polish a few products here and there and wait for the world to notice us. That, for me, was an expensive mediation with a bad return on investment, right? Now we decided that the demand is real. Governments are caring about sovereign AI. Enterprises need secured infrastructure and global players were not always moving very quickly. Some of them actually, we've realized move with all the urgency of the British passport office in August. So you can understand how close that is, right?

But that has taken us to different markets, whether it's India, Singapore, Malaysia, Thailand, Indonesia, The Philippines, Taiwan. And with the Astrikos investment, we're actually now starting to look into the Middle East and United States. We're having multiple conversations, particularly around real-time infrastructure intelligence, smart infrastructure, and more importantly, AI-enabled operational control. That also leads us into that GPU deployment, service level operations, data center intelligence and so on.

So we're not just dropping equipment in a room and hoping that someone is going to remember we have to switch the lights on or switch -- put the switch on. This is about real infrastructure where we're actually creating very complex machines. Now, this is also -- more importantly, it's about how we can help design, deploy and manage in these regions.

Remember, when we are going into a region, we're not just building from, let's say, India or Thailand as a low-cost base. We're building within those regions. Like Indonesia, we're building a team now. Singapore, we're building a team. Malaysia, we just started looking at hiring as well locally. So when I talked about Thailand, Thailand is a great example. It's becoming a very important anchor for us. Why? Because we've been very active in Thailand.

As you know, we're working in smart grids, we've worked in smart city, we've worked on data center security and critical infrastructure projects. With the announcement we made a day ago, Korat, that's where the story became real for us. This was about Gorilla owning land, Gorilla owning power, Gorilla owning fiber, water and execution at the same time. So the Korat, which is near -- in Nakhon Ratchasima is a campus that we recently purchased. It's roughly around 200 megawatts of total facility load, providing about 150 megawatts of IT load.

There is -- obviously, we are working with the government to help us provide more power within that particular campus. And currently, the government is talking to us about additional 250 to 300 megawatts of power being available through the local substations, which are right next to the plant or the land we purchased. Now we're not talking about a proper AI infrastructure campus. We're talking about not a hyperscale but near hyperscale quality. okay?

That means it gives us the ability to create high-density compute, it has GPU as a service, it allows creating sovereign cloud and hyperscale colocation. And really where it matters is it becomes a stepping stone into the next level as to how we're evolving. We're also looking at other land agreements in the region, not just here, but we're looking at Indonesia and Malaysia as well.

And we're looking to invest into Malaysia at the Johor complex where we can actually buy land and build data centers. So across the region for me, it is absolutely clear. Singapore gives us the financial, commercial, regional discipline. Malaysia kind of gives us the, what I call, the power-rich data center market. Indonesia gives us the population. It gives us the scale and the digital demand. The Philippines is developing really quickly, and what is happening is this need for cloud, AI and sovereign infrastructure and the demand is increasing and accelerating quite rapidly.

And Taiwan, of course, as you know, remains a core part of our DNA and which helps us develop all the products we want, whether it's the BMS products, whether it's your SOC/NOC and so on and so forth and more importantly, brings us the customer history. So in short, if AI for me was, let's say, a dinner party, so India would bring the appetite, Thailand would bring land and power, Singapore would bring discipline, Malaysia brings scale. Indonesia brings in population, but Philippines brings in the growth and Taiwan brings for me the engineering brain, and we have some very strong people. I think we have a little over 200-plus people in Taiwan.

So, for me, now, when I go to any meetings, I look at it and say, great. Listen, wonderful speeches everyone. Now how are we actually going to build this bloody thing, right? And that's very important. So we're moving from country to country, but we're winning at the same time. It's not just about creating an office and a fancy place. So we are becoming aggressive. And as you know, a few years ago, everybody saw us as a technology company or a smart technology company. Today, people are seeing us as an AI infrastructure partner, which is helping them grow to the next phase, which is sovereign, secure and building regional GPUs. I hope that answers.

No, that's great. It does bring up the question, maybe one question, one final question is that, what are your plans for fundraising to support a lot of this stuff? And can you give us an outlook into 2026?

Sure. I think Bruce touched upon this very briefly. I mean this is a very touchy subject for a lot of people. Everybody thinks we're going to dilute the hell out of that. But let me start with this very important point. I think I need to let the market know. When people hear AI infrastructure, they immediately assume huge capital requirement, therefore, huge dilution, right?

I follow some of the message boards, I stopped looking at them now because people keep thinking, God, this guy is going to raise $1 billion and dilute them. Frankly, some companies do that. And I can understand why they're upset by it. People get one contract, they run to the market, they issue equity, dilute the hell out of everybody else, very elegant. But it's like basically burning the furniture to heat your house.

You don't do that, right? That's not our model. What we are trying to do is, our approach is very clear. We wanted to be very disciplined. And as Bruce mentioned, we're trying to be as nondilutive or with minimal dilutive structures. That is very important for us. Even if we're going to $1 billion, a couple of billion market cap, we will keep that rigor absolutely. That means we're looking at various options, project-level financing, customer-backed structures, asset-backed debt.

Bruce talked about vendor financing, SPV-based financing, institutional co-investments. What am I missing? infrastructure funds. Then we have got strategic partners funds who are looking at AI data centers. We're looking at family offices who are looking at long duration of asset investment and not worried about the whole quarterly gimmick or anything as such. But the most important acquisition, which we did this year was the Gorilla Technology Capital, which is the Shackleton Finance acquisition with a full FCA approval. I think the market has missed the message on that.

What people don't understand is that we have created a new route to fund data centers and GPU-as-a-Service deployment. How? We're basically looking to work with, like I said, SPVs, build co-investment, non-dilutive project funding across the infrastructure pipeline. And so we are targeting roughly around $2 billion to $3 billion of funds under management by the end of 2027. So the strategy for us is to raise money, but not to raise money for the sake of raising money. It's to make sure that we match the right capital to the right asset. So we've broken down our assets.

So if you're looking at data centers, then we would be looking at infrastructure capital. People have asked me, how do you deploy GPUs? Isn't it going to be expensive? No, we're looking at asset-based or customer-backed financing. That's number 2. If you're looking at, let's say, long-term government contracts or enterprise demand like we have signed up recently with Yotta, then we're looking at contracted cash flow financing. That's number three.

Then if you look at sovereign infrastructure, then we attract institutions using the likes of Shackleton, where we attract pension funds, endowments, institutions, strategic capital, right, and family offices. So for me, the lazy answer would be dilution. The grown-up answer for me is structure. And personally, I don't think so Bruce and I spent the last 3 years building or strengthening the balance sheet just so that we could hand over a dilution sandwich just because we have some financial jargons being thrown in there.

Now, as you know, you asked about our outlook, we're looking at what, about $150 million to $200 million of revenue. Now again, that's another question for people. People are like, "Oh, my God, you've signed all these big deals. Why aren't you giving us guidance or re-upping your numbers, right?" I could do that. I could wake up one morning and just say I can do that overnight, but I have to be realistic. Data center projects do not happen overnight. The time taken to build the architecture, the time taken to work with the likes of NVIDIA, Supermicro, getting the architecture design correct, the networking and getting the supply chain.

Nowadays, everybody is talking about memory and storage. People don't realize it takes 5 to 6 months to get it delivered. So how can I sign a contract and then come to the market and say, "Look, I have re-upped my guidance." I would be the absolute idiot unless the market is missing something. We're not -- we're building infrastructure. So, the most important thing is, 2026 for me was a year -- is a year, sorry, where we're going to be proving that the turnaround is real and where scale. It's no longer going from $100 million to $120 million or $130 million. We're going from $100 million to $150 million to $200 million.

My personal target next year will be about $600-plus million, which I've already talked about. We said $500 million plus. So market, hear me out, hear Bruce out. We will adjust the guidance responsibly as and when needed. Data centers definitely take time to develop, deploy and finance as well at the same time. We're not talking about a microwave dinner where we can just cook it overnight. It's going to take -- we have to make the right level of guidance. We've got to get the market excited at the same time. It's not a 5-minute job. And I surely don't want to disappoint people at the end of 3 months and say, "Look, we've got to redo the guidance to a lower number."

And then finally, again, my message to the market, we're not going to fund this like amateurs, okay? The last 5 months or now I've got 4 months and 5 days, I have spent more than 3-plus months on a plane, not because I fancy sitting on a plane and having my bones aching, it's making sure that we kept the funding. Bruce and I are on a plane almost every week. We want to make sure that we are not wandering around Wall Street with a begging bowl every time we need a cable. We're making sure that the money is real and that it is long term and sustained.

So this is the difference between building a company or just a financing story. We're building a real company, John. So what is the outlook? Big opportunity, serious by discipline and pipeline and definitely no nonsense. So if you'd ask me, some people in this market are still doing this whole AI, like what is the best example I can give you? Like Mr. Bean trying to assemble an Ikea furniture without instructions, right?

Lots of noise, one missing screw and a surely very worried set of investors. So we're taking the opposite approach, land, power, GPUs, customers, contracts, cash flow. Most important, cash flow.

Excellent. Excellent, gentlemen. Well, I think we're going to have to leave it there at this point. Jay and Bruce, thanks so much for spending time with me today and with the investors.

Investors, to learn more about Gorilla, please visit our website or visit Gorilla's website. Our website is www.watertowerresearch.com. I want to thank everyone for joining us. And now I'm going to read a short disclaimer.

The views expressed in this fireside chat may not necessarily reflect the views of Water Tower Research LLC and are provided for informational purposes only. This fireside chat may not be distributed or reproduced without the written consent of Water Tower Research and should not be considered research nor a recommendation. WTR is an investor engagement firm, not a licensed broker, broker-dealer, market maker, investment banker, underwriter or an investment adviser. Additional disclaimers can be found at www.watertowerresearch.com.

Welcome to the Gorilla Technology Group Inc. Fiscal Year 2025 Financial Results Conference Call. As a reminder, the conference is being recorded. [Operator Instructions]

Before we begin, we will read the forward-looking statement. Today's call includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and projections about future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially.

Forward-looking statements often include terms such as expects, believes, plans, anticipates, may, should and similar expressions. For a discussion of important factors that could affect Gorilla's results, please refer to our filings with the SEC, including our most recent annual report on Form 20-F. Except as required by law, Gorilla undertakes no obligation to update or revise any forward-looking statements made on this call, whether as a result of new information, future events or otherwise.

I would now like to turn the conference over to Jay Chandan Chairman and Chief Executive Officer; and Bruce Bower, Chief Financial Officer. Please go ahead.

Thank you very much, Krista. Thanks, everyone, and thanks for joining. I will keep it quick. If you want drama, the market's already provided enough already today. So I will stick to the facts.

Now let me start with the headline. We reported a record full year revenue $101.4 million, up 35.7% year-on-year. This is the first time in our risk, we have lost $100 million annualized revenue. We guided the market at $100 million to $110 million, and we delivered inside that range. That matters because credibility matters, and we intend to keep it that way.

Now the more important part is how we got share. We executed a real turnaround. Our IFRS operating loss narrowed to about $13.7 million from $66.9 million last year. That was a remarkable improvement of $53.2 million or 79.6% reduction in the IFRS operating loss. Now our IFRS net loss netted to about $11.3 million from $64.8 million last year and 82.6% improvement. And IFRS basic EPS improved to about $0.51 from negative 6.13%, which is a 91.7% improvement. So yes, it was a proper sweep. It was not just a cosmetic one.

We did all of this while keeping the underlying profitability at scale. Adjusted EBITDA came in around $19.1 million and adjusted net income was about $19.9 million and with our adjusted basic EPS being 0.89 and an adjusted diluted EPS at 0.88. What I can tell you is that it is strong and it is very disciplined.

Now I know what comes next because investors always ask it, how did we do versus expectations for the fourth quarter. market consensus was roughly around $34.75 million of revenue and adjusted EPS of $0.30. Based on our full year results, our fourth quarter revenue was approximately $35.6 million, which is well above consensus. And based on the implied fourth quarter adjusted earnings, our adjusted EPS was roughly around 0.37, which is about 22% beat versus the 0.30 onset.

Now for the full year, the market consensus was approximately $10.6 million of revenue with an $0.8 billion for adjusted EPS. We delivered roughly around $101.4 million of revenue and delivered about $0.89 adjusted EPS, which is about a 6% beat versus confess. So the message from micro side is simple. We delivered record revenue. We delivered a major IFRS turnaround. We delivered underlying profitability that exceeded expectations.

Now let's just talk about the broader market because it has been volatile. The market conversation has shifted from -- you beat the quarter to, with AI spending hold up. And I'm sure all of you have seen this in the last few days and weeks. That is a fair debate, but personally, it misses the bigger picture. AI is no longer a discretionary software trend. It's rapidly becoming a national capability and a core operating layer for enterprises and governments.

Now the next phase of AI demand cannot be defined by 1 buyer or 1 deal. It will be defined by many buyers across various sectors, building permanent capacity, governments; regulated enterprises, telecom operators, logistics networks, financial services platform. This list is long and the spend is becoming structural. The compute is also evolving at a rapid pace. This is what the market is really missing.

Now AI compute is actually shifting from training that cycle to an influence led cycle. This is important because that does not time. It broadens demand, influence pushes AR into everyday workflows and mission-critical operations with increases the need for distributed complete across regional data centers and edge environments where latency, data residency and resiliency requirements matter.

Now this is where edge becomes a major driver -- as most of you know, we were one of the lead edge companies when we went public, and we continue to invest heavy edge compute expands. And what AI can do because it moves inference closer to the decision point is closer to the sensor, closer to the customer interaction closer to regulated data. It does our force multipliers for adoption in public safety, transportation, logistics, financial services, telecom networks, industrial and the whole plethora [indiscernible].

Now let us talk about scale of the infrastructure market in our region. We're not kind of relying on slogans. We're tracking that data very, very closely. We have an internal and of a research team, which is doing that, and we use external data at the same time. Now we see Asia Pacific data center investment growing from roughly $30 billion in mid of 2026, up roughly to about $90 billion by 2031. We see installed capacity broadly doubling from about 29,000 megawatts today to about 63,000 megawatts by the end of the decade.

Now Southeast Asia also follows the same trajectory, going from the low teens of billions towards roughly $30 billion by 2030 as more capacity is being built in the market rather than exported offshore. India is another example. It's scaling very rapidly. From a little over 1 gigawatt of installed IT load today, they're moving towards about 1.8 gigawatts by 2027 and to multiple gigawatts by 2030. We're seeing the same trend in the Middle East. We're seeing the sovereign build-out dynamic with market growth from low single-digit billions to a high single-digit brand by early 2030 as governments and national champions called local compute and secure infrastructure.

This is the structural build cycle. We are positioning Gorilla for. So what are we doing in '26? We are advancing our AI infrastructure and data center build strategy well across Malaysia, Thailand, Indonesia, Singapore and the other regions, including Taiwan and so on. We're expanding our evaluation work in India. We're progressing our strategy in the Middle East included Saudi Arabia, where memo has already been signed and we're very actively exploring data center development opportunities in that region.

We're also exploring opportunities to buy and/or build our own data center assets. Ownership changes the model. It gives us more control over activity and stronger long-term positioning and the potential to build recurring infrastructure-led revenue streams rather than relying on project cycles. Now in table, we are also strengthening our product edge for its next stage of adoption. Our core content cryptography will started to be ready in April 2026.

At our last of interception product suites remain in continued research and development as we expand sovereign grade capability across security and intelligence as well as compliance-led deployments. Now come 2027, we're also now putting a team together, which would be investing very heavily into 60 local introduction as well. Now we have currently got about 300 full-time employees today, a little over 200-plus contractors working on all the projects we have signed.

But based on just the projects we have recently signed we anticipate growing to about 1,200 to 1,500 full-time employees by mid-June next year, and that would be about an additional of roughly around 700 to 800 contractors. So we'll have roughly between 200 to 2,500 employees for the company at any given point of time.

Now investors want proof. They want execution, not a narrative. So I will speak directly about the signal that matters, delivery and collections more about the cash conversion. Our top customers are progressing very strongly, and our customer satisfaction is reflected in our payment behavior, okay? In the first 2 months of 2026, we have collected more than $22 million from our largest customers for solutions delivered and involved in 2025. We also expect meaningful collections in the coming weeks.

Now we finished the year 2025 with about a fair cash of $104.8 million. But what was very important that we did all this by reducing the total debt load to about $13.8 million, which is 35.6%, lower from the $21.4 million in the prior year. Now through the refinancing of certain lending agreements and the repayment of others, we also reduced our debt, releasing more than 5.3 million of deposits previously held as collateral against some of these loan obligations. Now this kind of balance sheet gives us very meaningful flexibility to execute existing programs, fund working capital to delivery cycles and scale our infrastructure strategy with discipline.

Now we've also spent at the same time, more than $11 million on buybacks today, which we believe the market continues to undervalue Gorilla relative to our performance and our strategy. Personally, I think you could call this confidence. I call it [indiscernible], right? Why? Because that leads me to my next one. We're aiming to be cash flow positive in 2026. That's not just a slogan for me. It's an operating objective that comes with very disciplined delivery, disciplined overhead control and a very disciplined cash collection.

And finally, a lot of people have asked me this question over and over again, Gorilla Technology capital. Personally, it's a game-changing catalyst for our next phase. It's designed to expand our ability to execute larger infrastructure programs by structuring capital efficiently, aligning long-duration funding with long-duration assets as well as enabling our customers to move faster with clear financing pates. Some people said, hey, maybe they're buying the bank.

No, we're not buying a bank. I mean you guys have to understand what Gorilla technology capital do. It strengthens our ability to scale data center peers accelerated GPU infrastructure deployment and more upon we participate materially in larger mandates with institutional-grade structures and governance. So if I summarize 2025 in 1 line, we delivered a historic revenue milestone, we executed a major profitability turnaround -- we strengthened the balance sheet and positioned Gorilla for the next stage of AI infrastructure, which is sovereign and regional, more importantly, distributed, which is becoming increasingly edge-enabled.

In 2026, we ship from proving we can build the work to scaling what we can deliver, converting execution into cash, expanding our data center footprint across India, Malaysia, Thailand, Singapore, Indonesia, Middle East and more importantly, using Gorilla technology to unlock materially larger programs without compromising. All this while accelerating our product road map, which means we're investing heavily into R&D.

Thank you for your time. I will hand over to Bruce, who knows the numbers well not to recite them without blinking. Bruce, please go head.

Thank you, Jay. I think you covered the main points in terms of the financials. I wanted to hit of things. So first of all, we mentioned that the cash balance at the end of the year was $104.8 million. I'd just like to emphasize that due to the collections so far this year, the cash balance actually increased. So as of the 26th of February, it was $108 million of unrestricted cash and $116.6 million of total cash. That is in spite of spending $3 million this calendar year, so in the last 2 months on share buybacks. So we have been able to increase cash and also buy back shares this year. So it's a strong start of the year.

The other thing I would point out is when we talked about freeing up the debt load or reducing the debt load and freeing up cash deposits, some people asked, why didn't you pay off all of the debt? Well, the debt that we have remaining, the $13.8 million is at an average interest rate of 3%. So to be blunt, it makes sense to keep it as flexible capital instead of repaying it and borrowing and higher rates.

The last thing I would talk about is we issued guidance last year of $137 million to $200 million as the revenue guidance range for this year. We are maintaining that. At this point, we're not prepared to issue gross margin or EBITDA guidance, but stay tuned in the coming months. We announced that basically the range for why is there such a wide range of $137 million to $200 million. It depends on the delivery schedule of certain data center projects we're pursuing with Freyr and also with others. That I think we'll have a very good update coming in the next month to 1.5 months about the timing of those projects, about the delivery schedule from NVIDIA and then also with the customers, and that should help to firm up the guidance and give you a better idea.

With that, I'd just like to reinforce what we mentioned in the press release, which Jay said, we believe that the balance sheet has improved to the point where we're able to fund growth initiatives and also to buy back the shares that we feel that they're undervalued and that we can take on a lot of the growth projects that we've talked about, not just the increase in revenue this year, forecasted to be in the middle of the range would be almost 70% increase but also the contracts that we have in the pipeline, so a $7 billion revenue opportunity in the pipeline. We believe that we can fund substantially through the access to debt facilities, mostly through project finance and then through the cash that we have on the balance sheet at the moment.

With that, I'd like to turn it back to Jay and if once I open up to questions, we can do that.

Thanks, Bruce. I'd like to open up the questions to all standing by. Thank you.

[Operator Instructions] Your first question comes from Brian Kinstlinger with Alliance Global Partners.

Yes. Close enough. Great. Thanks so much guys come certainly a very long way over the last 2 years. Congratulations on that. Has anything changed in terms of your best guess on timing for the first 3 phases of the Freyr partnership. I think the plan was project financing to help you start in April for Phase 1, September Phase 2 in December for Phase 3? And then the second part of that question, outside of financing these projects, are there any gating factors to starting these projects? And if so, what needs to happen in those time frames?

Brian, good to hear for you and thank you for your kind comments. We are on track with where we are today. Obviously, they're considering the market forces today, we have had some slight delays in terms of the delivery. But that said, let me kind of walk you through what has happened some grams have moved in terms of timing, and we talked about the a contract, for example, that is on schedule. We are currently in the final stages of getting our first set of GPUs coming through over the next few days and we'll be deploying it as we speak.

We have also accelerated the timing on some of the data center discussions when we spoke last, I think we were looking at about 12.5 megawatts of data center. If you recollect and we were looking at roughly around several hundred high-density airlines. What we did was rather than kind of commissioning them all on a single day, we're slowly putting them in plant-based. So power cooling network zones are all commissioned. Revenue ramps are going to be energized as we speak. And as the racks go live, we will drop in the clusters through our partner ecosystem, which also drives what I call the GPU as a service usage line.

Now what is very exciting for us, and I can tell you today, as we have now realized that we would need to kind of be deploying a lot of capital in the data center space ourselves because we have been inundated with a ton of requirements. So we are now currently looking at about more than 600 megawatts of capacity rather than the 12 megawatts alone. And that allows us to control our destiny over a period of time, which means we're looking at several hundred million dollars per year once all these racks and the GPUs are all in nation.

So from our perspective, Brian, the part to that particular point is a very controlled ramp-up, not a single bank. Now you talked about are there any delays. There are no significant delays so far. Thailand MOE, for example, it has been delayed because of the political transition, some sort of department organization. As you know, the new prime minister that has been elected. So we're just waiting for the postelection leadership and sign-ups to settle as we speak.

But otherwise, we are not facing any delays. We're going ahead with all of the approvals, all of the permitting, all of the site readiness all of the customer prerequisite flip as we go into it. So when the customer gets reopened now, I think we will start our billing on time. I hope that answers your question, Brian.

It does. My second question is you've got this large pipeline of other data center opportunities you've discussed. And not to say that your business development has been slow. It's been very fast. But do you think those customers are waiting to see how execution is on the first freighter contract? Is that going to, in the near term, hold back agreements? Or do you think those will be able to move forward without delivery on those 3 projects?

Absolutely not. Like I mentioned, our pipeline is exploding. And we have not been slow in our sales plan. I can tell you only the thing we've been doing has been restricting. We've been inundated and I'm not exaggerating it at is the right word for that. So first of all, the deals are mature at the start of the year of January this year, we were looking at POCs and MOUs and so on. So it was very promising since then, we have moved into late-stage commercial structuring or improve force contracting, which naturally kind of increases the scale and the certainty of the pipeline.

If you recollect what I told at the end of December, towards the end of December, we are making sure that we have certainty of the pipeline. Now I mentioned the $1.4 billion in Southeast Asia contract, that was only a catalyst. Once the government in telcos basically saw what we are able to deliver and we started signing up with the first 12.5 megawatts suddenly out of nowhere, it triggers some sort of a sovereign gain grade AI infrastructure requirement and a huge surge in interest for us. So I don't want to give you names, but what has happened is that the demand behind that is significantly larger than where itself. So that's one of the primary reasons why our pipeline is now enduring the dollars.

Third most important part, if things have changed from ambition. Governments are no longer looking at this ambition, it has turned into urgency for us. Now I mentioned this last time as well. Not only are we looking at GPU capacity as strategic infrastructure, the ship that actually moved into edge compute. Distributed environments are taking shape right now. And like I said, the market has missed that already. People think, oh, is the spending going to continue, it is going to accelerate. It is not going to continue at the rate it is going. It is going to exponential. We are sitting with every sale major customer on the planet. And I can tell you, these platforms are just going to explode in terms of compute requirements and demand.

Then finally, our execution has not just been on 1 data center, Brian. We've been doing data centers for a very long time. We built data centers on behalf of government, for example, in Taiwan, in Thailand, in Egypt and so on and so forth. So things like when we deploy large-scale lawful interception programs, which are more complex than putting up a data center, the governments and the organizations, they look at it and say, look, what is Gorilla delivered we see that and the confidence growth. So we are not investing in our past levels, but we are putting everything into motion. So like I said in my previous response, we are now targeting over 600 megawatts of power. So the opportunity to have this very comfortably substantial prime, and it's only growing.

Great. My last question, you had [indiscernible] in my career in your type of business is always a great leading indicator. How would you characterize the recruiting market in the geographies you're hiring? And then outside of the execution staff, are there significant AI HPC senior executive level that gives you that add strategy and expertise at the high level?

That's a really good question. So as you know, we are hiring at a rapid pace. What you don't see is on our website, the names of the top people we have hired already in Thailand, we're actually going strong hires of about 80-plus people. In Taiwan, we have deployed a significant data center team and an R&D team for our cybersecurity products. We have done that through what is called as a hub-and-spoke model. This is very important because our R&D platform and engineering needs to accelerate both our product and our services capabilities.

So on the services side, as you know, Satish came in mid of last year, and he's been driving all of the client impact and deepening our technical capabilities. On the R&D side, we've been hiring SDLAN postponed and cryptography, local interception capability, video analytics, we've been growing that product. And over the atomic by April, we would have a fully launched world first, fully ready post-quantum to SD-WAN. And we're already working on massive proof of concepts with customers as well. But this is what matters to localization. Every single region they're working in, whether it's India, Middle East, North Africa, Southeast Asia, East Asia. They're all asking about how are you building stronger land capacity.

So what do we do? We are building teams in Thailand. So my team in Thailand, for example, because we're looking at some very large data centers here, will be about 1,000 people by the end of this year. It will be probably 1,000 people in Thailand, will be about between 200 to 300 people in India and our Taiwan team will be not the 100-plus people. Now we are hiring senior executives as well at the same time. As you've seen, Thomas has come in and joined us as CTO of Infrastructure. Jackie has coming from the hardware side and become the GM for Asia.

We are also hiring next-level capability for them as well. At the same time, we're also making sure that finance and compliance are also tightened. So we are hiring to improve cash discipline, collections, control, audits and so on and so forth. So think about it this way, the hub-and-spoke model is going to be centered across each of these regions. And as we expand and grow, we will be spending our teams rapidly over the next course of few months. and the teams are already and running at a rapid pace.

Your next question comes from the line of [ Brad Naiga ] with Cantor Fitzgerald.

Thanks for the presentation. Just a few questions from me. Just to start off with on the gross margin. Just wondering on the mix, which resulted in a, let's say, a slightly different gross margin than what I was expecting, but I just wanted to understand what the mix of revenues is? And then the second question is around -- given that you're going to deploy the latest compute for data centers in Southeast Asia, what kind of level are you level of revenue are you modeling per megawatt there? What sort of use cases are you thinking about for that?

Bruce, do you want to take the first part of the question? I'll take the second part.

Sure. So I think a better way to think about it is 2024, we had abnormally high service mix in the revenue mix. So the majority was service. And then it was a higher percentage of hardware in 2025. It was sort of 40%. So that's why the gross margins were a little bit lower than you would expect. The other thing is that we announced last year that we had signed 2 major law enforcement customers in Asia. And in at least one of those cases, the margin that we have predicted going into the project was a little bit lower than we normally except that's because it was a key win for us as a client and as a solution to demonstrate our capabilities.

So altogether, that is why the margin drifted a little bit lower. I would say that going forward, so building on what Jay mentioned about the pipeline is we are much -- we have the ability to be very choosy about the projects that we do. So because we have so much demand, if the margin turns -- if the credit terms or the credit profile of the customer isn't right or if the payment terms aren't there, then we just say, I'm sorry, you either come online or we'll move on to the next project.

The other thing is that the data center -- the GPU as a service has an extremely high gross margin. So it's 70% plus 70% is kind of the minimum cutoff. There is obviously a depreciation hit because we would -- an SPV would hold the equipment and then that would be consolidated onto our financial statements. and we will take the depreciation charge, I would say, at scale, that would be like a 25% operating margin, but that is at scale, I'm not providing yet the forecast for margins for this year.

We're going to wait until we get the exact details firmed up. But so that's how I would say 2025 is kind of a dip in terms of gross margins, and I would see them improving over time and a much stronger margin profile for all the new business coming in?

Just to add to that as well, Brad, more important, we're investing very, very heavily into building the business for sustainable long-term growth and gross margins, right? Now that brings me to the second part of your question. No. In terms of pricing today, in Asia, it's structured either in what we call a capacity per server per month or in terms of usage per kilowatt hour depending on the customer and the program. typically for sovereign enterprise deployments, we are targeting contracted multiyear take-or-pay kind of a style, where the pricing and sustainable margins and cash conversion is predefined. So we know exactly what we're getting ourselves into.

Now we avoiding a single rate. I mean personally, I don't want to quote a single rate because it dates by GPU class, as you know, some land utilization profile, power, cooling specs, location, land values, service level stack and so on and so forth. But the proof point for us comes only when we sign these programs where the unit economics are very disciplined and our collections and our milestone payments protect our cash. So there is the whole single kind of an Asia price, if I may. We're not just looking at Southeast Asia, by the way, there's no Middle East or Asia price.

But that said, I can tell you, typically, if you're looking at CSP class GPU rack capacity, they can run in high 4 figures to low 5 figures per GPU per month. when bundled with power, floor space, connectivity, managed services, but also remember, these are long-dated fixed milestone agreement. So we often layer, what we call a service level fees, compliant components and so on and so forth. Now each of these can change, for example, in the U.S. spot rents for top-tier GPU can be 2x to 3x typically on what you see on structured regional capacity in Asia.

But what we are doing is that we are not putting a standard rate. And because our compute requirements are more stringent here and our contracted deals are much more longer, we are able to create a highly what I call competitive pricing as opposed to even the United States. So think about it this way. Where compliance premium and service premium will do about 20% to 40% where we include covenants, telemetry, managed the ops and so on and so forth. But the energy cost differentials mean that Asia deals are often much more profitable.

So if I may say this, combining Asia and the U.S. is like thinking like hotel in Vegas might be cheaper, but 10,000 in Bangkok are much more expensive than some of them even in Manhattan. Did we answer your question, Brad?

Yes, absolutely. May I just sneak in a quick a couple more. small ones. Does the Arctics acquisition that you made, does that carry like in terms of your strategy, does that -- are you planning -- do you have an explicit pricing and margin contribution for the new contracts that you signed for this? Or is it currently being bundled to strengthen your competitive advantage and increase like long-term customer lifetime value?

That's a great question. Let me kind of give you an update to why we invested, why we are integrating, right? I think that's your question. And what are we going to do? What is your spring hoard look like, right? If you'd ask me -- that would be a question I would ask myself. When we actually looked at Astrikos, First of all, what is Astrikos? Astrikos is a real-time infrastructure intelligence engine that does monitoring prediction, optimization for critical systems. Now it is already a deployed system in very serious environments, including some high state level smart city platforms, for example, the new Indian Parliament complex.

I think what I talked about it previously, and major initiatives in the Middle East as well. That matters because Astrikos is not a demo, it is a fully deployed solution. Now your second part of your question, what are we doing with it? We're integrating our Astrikos into 3 parts of our stack. First, most important, smart city and national infrastructure operation. It gives us telemetry addiction layer that makes national infrastructure more measurable, but at the same time, optimizable in the real time. Now what does that mean? It strengthens our ability to sell outcomes, not just the technology, with real uptime and response time, threat detection. And finally, we have what is called generating high operational efficiency for the customer.

The second is video intelligence and security. Now Astrikos typically announces real-time monitoring your positioning around critical infrastructure, security and operational workflows. It complements our video intelligence stack, and it allows us to improve our operationalization of the data across our SOX environments. And finally, this is very, very important. This is a big one. data centers and environments like a standard in the data center, you cannot run very heavy GPU environments. You will need continuous telemetry, predictive optimization, integrated security and operational automation. This is where Astrikos actually plugged into that requirement.

And then on the kind of the springboard and if I was looking at Astrikos, for me, it's a spring growth in India, but it's very immediate because it brings deep presence in the region, shortens our sales cycle improves our delivery readiness. In the UAE, we are already kind of working on building up at least in footprint. In the U.S.A., is a standard in a partnership-driven market. So we are kind of progressing market level entry work in that region as well. So think about it this way. We're a significant minority investor. We have an option to materially increase our ownership, but also giving us a lot of flexibility to integrate and progress the traction on a very large commercial scale. Got it?

Yes, absolutely. That's very helpful indeed.

Your next question comes from the line of Mike Latimore with Northland Capital Markets.

Yes. I'm a great year. excellent results there. I guess just a couple of things. You talked about maybe some more collections coming in here this quarter. Can you frame that a little bit more? Is that -- are we talking a few million dollars? Are you talking over or maybe you can't say it, but just kind of curious on that?

Bruce, do you want to take that?

I would say it's plus or minus -- it's $10 million plus or minus a few million, $2 million to $3 million on the side.

Okay. And that relates to the 2025 effort?

It's solutions that were delivered in the voice in 2025, yes.

And then just to keep it simple for me. The large Southeast Asian deal, so it sounds like pretty much no change there in terms of total value or value by each of the first 3 data centers. Is that right?

That's correct. But that has become a catalyst like I mentioned previously.

Okay. Great. And then Jay, you talk a little bit about maybe seeing your first group of GPUs in the next few days. I guess just a little bit more on that. Does that specifically relate to the Southeast Asia deal? And then also did you sort of say that you expect sort of to get some of these GPUs every week and then that builds over time? Or maybe just a little more clarity on kind of that pattern?

Sure. So I think we were creating a flywheel effect, if I may, Mike. What we are doing is we are making sure that we have delivery coming in every week. So the latest agreements we have with our OEMs is that starting next week, we're getting a few deliveries going in. But again, I mentioned this previously as well, we've actually won other contracts as well. So we are actually delivering against those contracts as well. So you will see a regular flow of -- that's why we've hired a very solid procurement team as well. which will make sure that these deliveries are on time.

So for us, these data centers are driving GPU demand. And for us, our GPU demand unlocks much more deeper national engagements. So don't look at as the payer contract is a one-off. This is actually, like I said, a catalyst to some very large contracts we've already signed. We've also agreed by the way, with all of the OEMs, local OEMs in the region. We have signed all of the MOUs that required we've signed all the LOIs and the pricing agreements, the Palms have been done, the SOWs have been completed. And as you know, we are now just working on the delivery schedules and the mechanisms over the next few weeks.

Got it. So these GPUs will go to more than the Southeast Asia customers, how it sounds like?

Yes. If you give us a rates on that. I'll give you a very concrete schedule as well.

Okay. Great. And then I guess in terms of the Southeast Asia deal, the first data center, you're still thinking gets up and running in the second quarter?

We're trying to push it for the first quarter, depending on the delivery schedules. But I'm 100% confident, 101% confident that it will be live second quarter. We've just completed the agreement on the bond. We have sent the bonds to the -- our OEM partners. Obviously, as you can imagine, it's not just the GPUs coming in. You've got a whole bunch of networking equipment, which have to come along with that. And as we kind of scale up with the customer and the demand accelerates, we will have to then kind of build on top of it.

Now one of the things, Mike, I think your question leads to another important aspect. We have been struggling to get all of the compute demand from our end customers to be satisfied in the regions. As you can imagine, the U.S. is investing in hundreds of billions of dollars, we don't see that kind of investment within the region. Yes, we've seen KKR acquired SCT for $10 billion recently. But again, to deploy at data centers at scale, we need a lot more compute. So we have decided internally that we were going to build our own using mobile technology. So we're currently targeting about 600-plus megawatts.

And hopefully, fingers crossed, we should be able to complete all of the signing of those by the end of this year as well. And we'll be going into full-scale production to the latter part of this year as well. So we're super excited, and we think we are actually creating a new market, which doesn't exist currently.

Great. And then maybe the strategy to buy and build some of your data centers change this question. But I think on your business update call in January, you mentioned that you're trying to lease out any available capacity you can in colocations across the regions? I guess any update on more -- any releases that you've executed on?

Yes, yes, yes. We already have signed many deals in the region. It's absolutely fascinating. But the problem is, like I said, it doesn't exist, whether it's 9 megawatts, 4.5 megawatts, 99 megawatts, 21 and 25, that's kind of the available capacity today, okay? So you're absolutely right. What are we going to do? We're simply going to turn and build new capacity and deliver infrastructure ourselves to the end customer, right?

Mike, I've not made this -- maybe I've not made this clear previously. Our demand is in hundreds of megawatts Okay. And Asia, not just -- I'm not talking to Southeast Asia or East Asia or even South Asia, Asia Pac as a whole does not have the capacity right now. India, for example, has only 1 gigawatt of fully utilized scale. And as you've seen recently, they had the AI Summit and India is absolutely going bonkers in terms of deploying the scale. But there are other structural issues. We need power, we need water and so on and so forth, right?

So we are working. And just FYI, we are working very closely with the Indian government, to make sure that we get our infrastructure ready across various requirements and various architectures and edge deployments in the country as well. So long story short, keep your eyes in your field, we are definitely headed in the right direction over the next few days.

One thing I would add to that when we're looking at reserving or lining up capacity or building it ourselves, this is a different -- we're not in the business of building scale and building it and hoping the customers come. So the business here is purpose-built, AI-focused data centers or GPU as a service for those clients. So what that means is, first of all, we're not going to invest capital until we see clear customer demand. The second thing is that we demand customer prepayments so that money talks.

And then in most cases, the customer prepayments are an integral part of our financing strategy, so that in between project finance and customer prepayments we can secure 90% plus of project CapEx cost. So what we found is that when customers show commitment upfront, it obviously makes us more comfortable to move ahead and also makes it more likely that the economics work in our favor.

Your next question comes from the line of John Roy with Water Tower Research.

Obviously, some things changed over the weekend. I was wondering if you could give us any kind of update on operations or outlook for the Middle East given the Iran-U.S. situation?

Roy, thank you for the question. First of all, to everybody who's listening and everybody out there, I'm genuinely sorry to see what is happening. My heart really goes to all the families caught up in this and to everyone who's lost their loved one. I'm feeling very, very sorry. I've got trends across both sides of the past.

Now from a business perspective, John, we are monitoring the situation very closely. And as you know, we have a very, very disciplined risk posture. At this point, we have not seen any material impact on any of our operations. Egypt is progressing at full flow. Our delivery continues to guess plan. And across the region, we can see we're continuing to execute with a very appropriate caution, strong compliance and a very clear operational controls.

Now what we are watching for are very practical factors that matter, logistic routes being more, supplier lead times, local security conditions, FX exposure, collection cycles any regulatory changes that could affect movement of goods for personnel. If anything changes, the impact would likely show up on timing rather than demand. In that case, we will respond very quickly. protect delivery quality of our delivery, update the market when there is something definitive to report. But the trends down in our favor and it favors very strongly, and they're accelerating, not slow. I hope that answers your question.

Yes, it does. Actually, speaking of trends, and you obviously was talking about AI in India. Can you give us maybe take a step back and look at the macro AI environment? And what do you see happening out there in general?

Sure. That's actually a good question. I think a lot of people keep asking me, and I've been speaking about this at various events as well. I would divide this into what I call 3 different trends, John. First one, in no order, right? AI is currently becoming national and a regulated infrastructure. If you look at governments, telecom operators, regulated enterprises, they were treating the eye compute as strategic capacity tied to their sovereignty, data residency, compliance and critical services.

Now that shifts demand from optional pilots to what I call targeted programs with long duration and intent. So think about -- look at Asia. They are rapidly drawing up their chats now and thinking we don't want to fall behind. And so now they're coming up with large budgets but more importantly, we have long-duration intent, as I mentioned.

Now the second side to that is the center of gravity, and this is very, very important. Again, I don't know why I'm stressing this, but I would stress you this again. market is getting this wrong completely. It's all -- people are talking about, oh, this is not going to sustain the investment into AI and the companies are investing hundreds of billions of dollars in the U.S. and in China. The center of gravity is moving from training to inference and from inference to distributed influence.

Training is very lumpy, okay? Inference is very persistent. You need to take that. I think most people on this call, I'm happy for you to take this message. Training is very lumpy. Inference at the same time is persistent, which means as the influence moves into everyday workflow, your compute demand spreads across regional hubs and closer to the data source which drives our more build of regional data centers. It is not going to slow down. It is only going to go up exponentially.

And that brings me to my third trend, which is edge. Now as is expanding the addressable market dramatically, Edge brings AI to the decision point where latency, privacy and resiliency, all matters -- so what happens now? It accelerates the adoption across public safety, as I mentioned previously, transportation and telecom networks, logistics, industrial operations and so on and so forth. These things do not replace data centers. it multiplies us. Once again, it multiplies them by creating more endpoints that we absolute regional capacity and orchestration.

So think about it this way. In the future, you're going to find a lot more what I call distributed inference points, which will create a huge requirement of regional capacity. And that's why you see the likes of open AI or meta or Google or anybody else in the market, they are moving across a distributed environment. And those trends favor us very, very strongly, and they're only accelerating John, they're not slowing down at all.

[Operator Instructions] Your next question comes from the line of [ Barrett Boon ] with RedChip.

Jay and Bruce, congratulations on the transformative 2025. I just had one question regarding Quantum Safe Networks and your SD-WAN product. Can you share some concrete milestones that investors can look for?

Sure. As I've mentioned previously, we have actually created a very strong product, and we've already tested it very effectively in the last few months. Roger's team is very confident that they will be able to launch it by end of April 2026. Now just to give you, when we deploy AI infrastructure, we're not just dropping GPUs in the room. We're talking about secure connectivity, telemetry, orchestration and compliance layers, okay? These are very, very key important.

People need to understand we're not selling hardware or we're not renting hardware. We're providing ourselves. That means your SD-WAN has your quantum safe encryption allows us to control the network edge to the core very security. That creates for us the solution value and improve the margin mix. That's number one.

Second, our quantum solutions and why the people be like, oh, they're just going after it because it has the word quantum? No, we're not. People think that are less. They make edge AI viable. Why? Because edge compute only works at scale, if connectivity is intelligent and more importantly, secure. So what does SD-WAN do? What is our post quantum SD-WAN do? It gives us traffic optimization, it allows segmentation and performance control.

Now post-quantum crypto future proofs the transport layer. So once you build the transport layer, it will help future proof that and together with the distributed AI architecture, which we just responded to it makes these architectures deployable both in a national and an enterprise environment.

Now what does that make us? I think that was probably where we were headed to us with your question. They do not position us as a rent or a compute for rent kind of a provider. It positions us as a trusted operator. That means we can design solving grade, quantum safe, policy-compliant AI network. And more importantly, we can help you GPU generate additional revenue secure network that protect it and more importantly, what makes sure that neither cause the part when we get more complicated. When the world gets more complicated, like we are in today, we make sure that our non and our quantum does not fall apart.

That's very helpful. And congratulations again.

This concludes the question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you very much, Krista. That was really helpful. some very impactful questions, some caught me off guard as well, which is interesting. But to all our investors, to our analysts and every person who's supporting Gorilla. First of all, thank you. You have trusted me as and the entire Gorilla team, long enough to let results replace speculation, okay? But are people out there who say, our contracts are garbage and our numbers are garbage, that's okay. It's speculation.

We are building the AI infrastructure that government and critical industries will rely on, and we intend to execute with discipline. To everybody who knows me, they know me as someone who will execute with discipline. So what I will do is thank every single one of you. And I will stop here and hand over before my tea gets cold. It's 5 a.m., actually 5: 25, and that would be a genuine crisis for me. Thank you, everybody. Have a lovely day.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Hello, everyone. This is Craig Brelsford with RedChip Companies. Thank you for joining today's event with Gorilla Technology Group, which trades on the NASDAQ under the ticker GRR. With us today, we have Jay Chandan, Chairman and CEO of Gorilla Technology Group; and Bruce Bower, Chief Financial Officer. Today's event will consist of management addressing pre-submitted investor questions followed by an analyst Q&A session moderated by John Roy of Water Tower Research.

Before we begin, please allow me to read today's safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results, along with other statements about future expectations, beliefs, goals, plans or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties.

Let us now turn to those presubmitted questions. Jay, are you ready?

Absolutely ready. Thanks, Craig.

Can management break down current signed backlog versus announced pipeline and outline expected revenue recognition over the next 4 quarters.

Yes, definitely. I will give you the real picture without pretending pipeline as revenue. Firstly, backlog for us means contracted revenue. It is signed, scheduled and tied to delivery milestones. Most importantly, going into 2026, our signed and contracted backlog is well north of $100 million today. And that is the execution base we can deliver a guest. Now pipeline, on the other hand, is what we call qualified opportunity set, and I'm going to define this again when I complete the answer in detail. It matters a lot to us because what is important is that what we do not book becomes contracted until it becomes contracted, we don't move it into the backlog. Now the important point of scale, we're actively pursuing deals well in excess of $10 billion across the AI infrastructure, national systems and data centers today. And this, for us, is not wishful thinking. These are opportunities really at scale, but more importantly, it is also something we're measuring ourselves against.

Now the numbers for 2026, we have guided $137 million to $200 million. Now that range is built on the backlog driven by the base plus the phased ramp-up in our Asia, Middle East, Europe data center programs as well. Now we deliberately sequence delivery so that we have typically signed contracts in hand that exceed what we intend to perform within the single year. Now on data center specifically, our operational target is to deploy up to 100 megawatts this year -- by the end of this year and roughly a few hundred megawatts, which we are expecting to sign over the next few months to be 100 megawatts by the end of next year, obviously subject to contracting approvals in the delivery sequencing and so on. We will only disclose the specific sites and basis when we are contractually allowed to and able to.

Now on revenue recognition, this is what our next 4 quarters look like. Early quarters are basically mobilization, engineering and procurement milestones commissioning, SOWs commissioning and getting all the delivery schedules. And finally, more importantly, recurring operations as the Raco life. So you should expect from us a controlled ramp-up through 2026 as contracted milestones convert into revenue and utilization as we drive the services built. Now if you want me to respond to that particular question in a single sentence, we have a contracted base well north of $100 million, a guided ramp-up in 2026 bringing up to $200 million. We're chasing a pipeline of over $10 billion while scaling AI infrastructure in megawatts. Now I told you I'm going to define what the market sometimes construes or misconstrues. Signed backlog means executed contracts with delivery milestones. These are not MOUs. These are not verbal commitments. These are what converts revenue as milestones as they are achieved.

Number two, the assigned backlog. Now a portion of the signed backlog scheduled for the period, this is not the full multiyear value. This is for that particular year, and this is our execution when it comes to near term. The third, announced pipelines. Now these are publicly discussed programs that we are progressing. They are not fully contracted, and they're not fully defined in terms of the number of years and the number of phases, but that moves into a backlog as the contract moves forward. Then the fourth most important internally qualified pipeline. This is the wider opportunity set for us. So this is not revenue, not guidance, but this is the future growth once contracted. Bruce, do you want to add something to this?

Yes. Thanks, Jay. I just want to add that we've always been very clear from the initial announcement of the contract with [indiscernible] there were several phases. And then basically the timing of the revenue recognition would vary depending on when it was delivered to the -- each of those individual phases was delivered to the end client. The delivery schedule depends partly, of course, on us, but also depends on the client. We have to agree the design, the architecture, scope of work, timings for the -- they have to approve the overall design, and then we have to make sure that we have a delivery slot. So that is why that range is so wide. As we go through the year, first of all, we're optimistic that we'll do 1 or probably 2 of those deployments. And Jay mentioned up to 100 megawatts. So as we go through the year, I think we'll have more announcements to make.

And then the second thing is that, that range will tighten once we have the timing set and then it will move from basically a very advanced opportunity into backlog because we have, again, contract signed at the delivery date scheduled. We have an amount next to the date. So as we go forward in the year, hopefully, we'll be tightening that guidance and we'll be moving to the upper end of the range as we deliver the projects.

Thank you, gentlemen. Number two, what is the progress for both a U.S. acquisition and a U.S. new win?

Craig, we are progressing on both, and let me answer it properly without turning this into a soap opera today. We are pursuing the U.S. acquisition. It is very active, and it is very real. But it's not something like you buy a sandwich at Subway, right? We are going through diligence, contracts, customers, compliance, all the boring bits that stopped a public company like ours ending up on the front page for all the wrong reasons. Now on timing, there's a very practical reason why it has taken longer than anyone would like. The U.S. government shutdown slowed the procurement and the approvals across the system. Now that has had a knock-on effect on the contract cycles for the company, which we're potentially looking to acquire. But what -- what happens is when the contracting slows, our process also slows. So this is not just an excuse, it's just machinery.

Now on the new U.S. win, we are working on opportunities, which we will announce hopefully in the next few months. as they contracted and disclosable. Now until then, you will get discipline from us, not theater. But at the same time, in parallel, we're also building globally, it's not just about the U.S. We're working with our partners, BroadSat, NVIDIA, HPE and so on. to make sure that we are delivering and advancing at large-scale data center opportunities across the globe. It's all across Asia, we're looking at Southeast, East Asia, India. I'll talk a little more about it over the course of this webinar. And then, of course, we are scaling our delivery capabilities. Today, we're proud to say that we have 4 delivery centers for data centers across the globe. That includes Southeast and East Asia, includes India, Middle East, North Africa and, of course, Europe today.

And then finally, the most important thing is the U.S. acquisition is progressing. The U.S. wins are being pursued as we go through proper disclosure and discipline. But more importantly, we are executing whilst we build the U.S. as well at the same time.

Great. Thanks, Jay. Who is or are the client or clients for the $1.4 billion contract?

I understand why people ask me this question over and over again, but I'm not going to name the end customer on a public call, right? This is a very fast way to turn a commercial contract or relationship into a legal hobby. What I can say is that as per our public disclosure, our contractor counterparty is [indiscernible] in Singapore, and we are delivering the AI data center backbone work under that agreement. I think most of them have seen potentially the announcement by the government, where they have validated the data center approvals within the region, I think it's about $3 billion to $4 billion. We're not to conversations with the government as well, and we are looking at also deploying our AI data centers at scale here. Now the part that should make the investors very happy is not the case. It's real substance. Now this is a data center and a GP deployment program, which means we're building AI reasoning workloads. The market has moved beyond how many GPUs to have effectively and efficiently, you can run your rack scale systems your liquid cooling, your networking and how do you scale the operations.

And that's exactly what we're doing today. On the technology side, we're architecting around the black well generation and the next step up, which is your B-300 Grace [indiscernible] systems. We are using NVIDIA, which is positioning the HGX for AI reasoning with much higher compute and increased memory, and that's exactly where the market is going today. Now if you look at the implementation of our Rack scale systems like the GB 200, which is the and the B30 results of NVL72, which are fully liquid cooling integrated with all of your Blackwell ultra GPUs and your grace CPUs, we are working very closely with our customer, which is fair. And we will talk about this all day long in terms of delivery capability, our architecture choices, why what we are doing and what we have been aligned with the compute market that's headed, but more importantly, where we are using our P300 to GB 200s and GB300s at scale. Craig?

Thanks, Jay. In your recent call with Water Tower, you said all phases of the project have been completed, when can shareholders expect to hear financing in terms of the Freyr deal?

I'm happy for Bruce to chime in to the latter part of my answer. But when I say completed, I think I did not mean we finished building and gone home for tea, right? I think the market needs to understand I mean the heavy lifting phases that make or bake these programs are complete and are done. The technical architecture, the delivery sequencing the commercial structure that lets us execute at scale without playing Russian relate with our corporate balance sheet. Now that is the point of our model where we fund the project and the SPV level, we keep very clearly the corporate cash discipline rather than stuffing debt into the parent company. Now on financing terms, we're at the final stage. We have investor term sheets on hand. We are working through contracting and documentation with a very clear preference for nondilutive project level capital. Non-dilutive key word and the export style structures rather than lighting shareholders on fire just for sport. That's not us.

Second, why this word matters is because the funding is tied to commercial utilization and face delivery just not wishful thinking. At the same time, we're also working on the OEM side so that we can place the orders and lock the lead test I think the market needs to understand the lead times are significant nowadays. So it's not just a generic model build and a data center build. It's a very specific AI native architecture and supply chain does matter. There are so many components which people just think it's not just going to drop from the habits. Now Phase 1 has already been defined. As I've mentioned previously, I think Bruce and I talked about this. We have about a $300 million plus deployment starting in Indonesia. And then we're leading into the AI infrastructure deployment for the next phases, the GPU deployment, multiyear SLA operations and so on. So -- but what we have done is we've built a very strong fortified cash position to execute at scale.

So when should our shareholders expect to hear more from us -- as soon as the financing documents are fully contracted, locked in, all of the ordering and the mobilization milestones are locked in that investors should watch for what we believe are the practical ones notice to proceed, procurement lots awarded, first racks powered to go live in early 2026. And if anyone is still getting impatient, I get it. but this is not a raffle ticket guys. I mean it's infrastructure. I would rather be late by a fortnight or even a month, then go wrong by a week. Bruce?

Yes. I think just to build on that, there are 2 really components to the question. So the first is where are we with the projects? So we have financing term sheets in hand and we're progressing on those in parallel with the commercial realization of the project. Like Jay said, we can only announce the final close of the documents when the project is delivered. And basically, the project can't close until the goods get delivered. So to some extent, we're dependent on the delivery schedules of the underlying goods. And as we've mentioned, there's been some delays there. I would just say that building on what Jay said, we are pursuing project finance. Project finance means it's nonrecourse to grow the parent company. It becomes basically a lockbox where the contract and then the assets that we purchased, which are the GPUs go into. Customer pays there. The cash in the first instance goes to pay the interest and start paying down the principal and then it pays Gorilla management fee. And after some time, there's excess cash, which gets released to Gorilla and the financing is paid down. We try to be -- we are extremely disciplined in our deployment of capital.

So we're looking for an under 3-year payback period on the project finance. So that means that after -- by the end of year 3 at worst case, we own the assets outright, we can realize the cash flow in subsequent years or we can sell them if we want. Second thing is that there is the quantum that comes from debt is usually 85% or more of the final cost CapEx. So we're able to project finance a very large chunk of it in between customer payments and Gorilla equity, Gorilla would probably invest $20 million, maximum $30 million in an individual deployment, at least $300 million or $350 million deployment. So in order for us to do these first 2 deliveries, we have the cash and the financing relationships, meaning lending relationships to do that. The other thing is you're asking about the end customers. I mean, as Jay mentioned, we can't disclose that. But I can tell you something about them is the kind of people or the kind of clients that want a purpose-built data center that's 10, 20 megawatts for training and AI models or for running inference on a massive scale are either governments or their household name corporates where they have such a scale that they know exactly what they need.

They can define it, and they can pay for 10, 20, 30 megawatts and are happy to do a 5-year contract on it. So that means they are good credit risks. That's why the project finance makes sense. If we're doing mom-and-pops or if we are doing to kind of build a huge architecture and hope that people come as clients, it would not be financeable. But it's financial because it's purpose-built. It's precisely for the customers' needs. It's a long-term contract with a very high-quality off-taker

Thanks, gentlemen. Given the HF IAA time line, can we expect insider ownership filings on 18 March?

Yes, that's a mouthful Creek HF IAA. Yes, we will fully comply with the related requirements. And we will also come back to all of the SEC reporting obligations, where filings are required they will be made in line with all of the applicable rules and time lines, and we will ensure that the information is complete and fully supported. I mean, the point is very simple, right? We do not play games with compliance. We want to make sure that we will disclose what is required. We will disclose when it's required. And more importantly, we will do it in a way that stands up to the test of the auditors, regulators and more importantly, common sense.

Thanks, Jay. What is the impact of rising NVIDIA products and memory prices on gross margins and order intake?

That's actually a really good question. I mean, the prices have moved. I mean, no question. It's -- anybody who doesn't understand that is probably living under the rock. For the context, I mean, our trend force forecast server DRAM contract prices up by about 60% to 70% in Q1 of 2026. And there's also been a reporting, by the way, of the HBM3 prices up roughly 20% to 40% for early 2026 deliveries. Now the good bit is that this does not change our trajectory because we do not run a [indiscernible], okay? Where we buy hardware, pray and just hope for the margins to supply. That's not the kind of business we're in. We structure the program with project level economics which means we have the procurement gates, we've got all the pass-through where the appropriate and multiyear service agreements are signed, utilization revenues laid on the top. But more importantly, that's why our guidance of $137 million to $200 million is built on the contracted base which we're able to execute, not just wishful think. Now a simple way to think if the memory prices are up by, let's say, 20%, just example, then the all-in cost moves up by high single digits. If it goes up by 30% to 40%, then you're looking at double digits plus across the blended full rack, okay?

Now we can absorb single-digit movements but without -- with the proper contracting. But what happens at this point of time is when you're looking at double digits, then the customers have to pay us more, so if you will see us actually define that over the next few months. On the order intake as the prices are getting higher, there's a signal of urgency. Real buyers do not haggle. Real -- I mean you heard Bruce talk about governments and even corporates, large corporates. They pull the decisions forward. They make sure that the secure allocation because they were willing to pay the premium price of what is it today because the cost of not having the compute is higher than the cost of having the compute. So if anything at all, if I'm being very -- if I can make a remark, it separate stores from operators, and we're just getting started. So the demand has only increased but the price is also pushing is being pushed up.

Thanks, Jay. How big was the investment in a street cost AI? And how does it fit into the overall growth strategy?

So we have not published the exact check signs. I'm not surely going to invent a number on a live call. But what we have published is the important part. Now we are a significant minority with an option to materially increase our equity ownership with a ROFR. Now that tells you that this is not a casual fund. It is strategic. It's a strategic foothold. It's a clear path to scale for us. Now why this fits into our strategy, [indiscernible] is real-time infrastructure intelligence. It does monitoring, prediction optimization of critical systems, which means it plugstrate a way into what we are building. Our video intelligence models tax, our Smart City architecture, our GPU as a service data center model. This kind of aligns really well. And it helps us immediately upgrade our capability and not just build a science experiment here. Now why India, India is currently becoming a headlong. It's -- India is in the middle of a very serious infrastructure expansion. I think you've seen in the last couple of weeks even. The numbers are not subtle. The AI data center market in India is estimated to grow from roughly about $1.9 billion to about $4 billion in the next couple of years.

The data center market, it will be roughly around $30 billion by 2030. On capacity, I think the market currently is at about 1.7, 1.8 gigawatts you're looking at about 8 to 9 gigawatts by 2030. Why do we notice? We're in very active conversations with some of the key players in the Indian market today. So Astrikos allowed us to go into the market. It allowed us to bring delivery at scale. It allowed us to bring an integrated platform to the country of India. And it's not just India, by the way. Astrikos has given us a springboard into the UAE, the U.S.A. By the way, Astrikos has an office already present there, and we're expanding our capability in the United States are using Astrikos and, of course, India. With a deep Indian presence and combined with all of the strengths of delivery potentially even in the Middle East and Asia, we come together as a deployment ready state-level smart city platform and more importantly, we're taking the references of Astrikos into the global level.

So for example, the new Indian Parliament complex has been deployed as deployed Astrikos solution. The major international and national infrastructure programs in the Middle East as well as India have been deployed by Astrikos. So we -- it's a marriage made it heaven.

Thanks, Jay. What is management doing about the current share price?

Everything Well, Bruce, I'm happy for you to chime in. We do take our share price seriously. And I think the market understands that already. I mean if they do not, I don't know what else I can do. Why aren't you have to run a business to please the daily taker guys. Okay? We're certainly not here to satisfy any short sellers. What we are trying to do is a very controlled execution disclosure, capital allocation, and we're doing all 3 at the same time. This is not an easy job. But on capital allocation, we just did not talk about buybacks. We act it. I'll let Bruce talk about the details. We increased the authorization to $20 million, I think we've repurchased over $11-plus million, leaving us about $9 million still in the city. We have a very strong position of cash and the most important thing is that we have done these buybacks with that compromising on any of the committed projects and our growth story, okay? More importantly, we've also tried to buy. This is very important for the market to understand we have tried to buy large orders, but we could not fill them just because the stock was simply not available insights.

And this is not a management problem. This is a liquidity reality. So on disclosure and credibility, we publish, we verify and most simply, we do not try to hide class all. But we will be releasing our full financials late Feb to early March as we have promised. But more importantly, here's the blunt truth, right? We cannot start people from talking rubbish. What we can do is continue to deliver, keep improving through our liquidity, through our fundamentals and keep compounding value until the market has no choice but to play catch up. If I can be as prudish I can, we're not here to wrestle pigs in the market. We're here to build the firm and let the results do the show. Bruce?

Yes. So Jay covered the basics of the buyback. So we announced earlier that we had increased the authorization to $20 million. We've been active in the market, so especially end of last year, beginning of this year when the share price was in the 11 category, we really stepped up. So that's one thing. We run the numbers 100 times, and we are very confident that we can fund our growth plan as is and also to continue to buy back shares. The other thing I would add is, so focus is execution, right, execution, execution and execution. The reason why we're so focused on execution is because we have an enormous opportunity in front of us. As Jay mentioned, when the pipeline runs into the multiple billions, we want to make sure to stick to lending, so to say, right? On the last quarterly conference call, we mentioned that we had a sort of internal target. This is not public guidance, this is not official guidance, but you can easily do the math on the fair contract alone and see that we could exit the year with a $400 million or $500 million annualized run rate.

And then if you're talking about deploying hundreds of megawatts over the next 2 years, that would take the revenue into multiples of that figure that I just cited. So it's a great market opportunity and our focus is laser focused on lining up to customers, the operations and the financing to get all those contracts in order. That's the first thing. Second thing is, of course, capital allocation, where there's excess capital where we believe we have excess capital to allocate to buybacks we do that. The third thing is we've just been out there telling the story. So I've been -- and Jay have been attending conferences, more often at a cadence doing webinars and other public interactions and then we were just on a road show last week in New York City, meeting with dozens of institutional investors telling the story. And I have to say the reception was very warm even though New York City is very cold otherwise. There is a very large base of massive institutional investors who are getting up to speed on the story. And the last thing I'll say is, if you look, this is 1 of the slides that we love to focus on, right?

So this is the [indiscernible] so far of the management team, Jay and Raj, when they came in, in 2022. You've seen revenue go from $22 million to $100 million to $110 million is the range for 2025. We're guiding to $137 million to $200 million. A management team went from $22 million to, call it, $170 million in a few years would be on the front page of business magazines. So I think more and more, we're just going to stand on the track record. I'm going to tell people about what we've done and if they don't like it, too bad they miss out.

Thanks gentleman. Multiple times, the PR team has made mistakes in PRs. Any plans for restructuring this team?

I'm sorry, that's a stupid question. No, we will not. We take accuracy very seriously. And when we get something wrong, we may fix it fast, we tighten the process. That said, I am not going to let [indiscernible] run our business from a message board, okay? Our team is doing a strong job. We have improved governance around disclosures. Here is what we have done, tighter internal review, legal sign-off where required, single accountable owner for final release language. Now I've seen this time and again, the market, especially the armchair critics I call them without naming them. They keep telling us you have to do this, you have to do that. You have to try and run a business before you start commenting. It is very important, okay? Because we are restricted by a number of things. I can't just come out and say I've got these contracts which are ready to sign up because I have to get approvals. I have to get released languages. I've got a whole bunch of lawyers I need to respond to. I've got the SEC breathing. If I do something wrong, they'll bring down my next. So if something slips we will correct it transparently and move on.

So we're improving the process. No, we are not going to have any public flogging just to satisfy people who have no idea what disclosure control is from a door handle. Craig, that's my response.

Gentleman what's the status of the smart education project?

It is progressing, Craig. Just slower than any of us would have liked to hear. We have been selected as the preferred party selected and the program remains active. Anybody can do a simple search check the website, you'll be able to see on the government website. What has changed is the timing. The time government as most people know, have 3 prime ministers in 3 years. Now we're going to elections in March. So we have to have significant alignment, get the budgets in place, wait for the final award let does internal sequencing to compete. That's the government process. And anybody thinks that government was easy. I'm happy for you to come and help me out here on the ground. That's the phase we are in right now. The important point is that nothing has been canceled. We remain in lead. We have the letters which prove that we have been obviously the preferred party but more importantly, we keep the solution ready. We're engaged with all the stakeholders. We move as soon as the government moves into the final steps.

Now at the same time, Thailand is not a 1 project story for us. We're advancing in multiple initiatives in parallel and larger initiatives with the larger discussions. We're in very active discussions with the larger part of the government to actually deploy AI infrastructure at scale. So what we are doing is that we are working with the government to even -- I can tell this publicly, we are actually working with the government to potentially even deploy between 200 to 300 megawatts of data center capacity over the next 18 months. And so what we do is we will continue to execute, we will continue to build, and we are not just waiting here for 1 document to arise.

Thank you, Jay. How many data center projects are we anticipating, where and when?

That's actually good question. So listen, I don't think so we want to all play data center bingo on a live call, but I'll give you this, which is -- which will give you the shape of what your internal process is today. For the already announced $1.4 billion project, it is paced multi-site rollout rather than on [indiscernible]. You should think of this as several facilities between Indonesia, Thailand and Malaysia delivered in stages as the procurement and commissioning go live and the capacity ramps up. Beyond that, I just mentioned, we have -- we are now targeting deals well over $10 billion. We're in advanced stages on multiple fronts in Asia Pacific and to name a few, Singapore, Malaysia, Thailand, Indonesia, Japan, Australia. We are targeting very closely in India, large, large conversations going on right now. Definitely the Middle East, Saudi, Abu Dhabi, Dubai. And as you know, we continue to build out our data center for the Ministry of Defense in Egypt as we speak. In a number of these, we are working with local partners where they bring site power and all of the other AI infrastructure layers, including GPU, operational capability and so on. And as and when we are able to quantify I want to make sure that these contracts are signed and the disclosure is permitted, and we want to stay credible. I hope that answers your question, Craig.

Yes, you have.

I would also add 1 thing to that is I think everyone can sort of tell that the top of the funnel is quite wide, right? There are numerous conversations going. So 1 of the things for us is to select the best opportunities for us, right? It's not just signing a contract for the sake of stain contract. You heard the financial discipline that we apply -- so basically, I know other GPU as a service operators have looser financial terms, right, longer payback periods, et cetera. We have a very strict filter. If it doesn't meet those filter, thank you for the conversation. We move on to the next opportunity. So one of the reasons why we mentioned all these opportunities is because they're kind of making their way through the qualification system on our side, but the ones that survive will be only the ones that are most attractive for Gorilla. One of the things I can also share is that all these jurisdictions that we mentioned have much lower power costs, they have much lower rental costs and other infrastructure costs and certainly, labor costs the United States and Europe. So the economics that you used to seeing for GPU as a Service, while attractive in a developed market are actually more attractive in Southeast Asia. So that's why the numbers stack up for a 3-year payback period on financing, et cetera.

Just to add to that, Bruce, I think you're absolutely right. One thing I really want to add to that is timing, the right expectation of face delivery between now and 2027, 2026 of course, we are already deploying. For people who do not know, we deployed the first P300 servers last month for the government of Taiwan, and this is the first B-300 implementation in Taiwan ever, for liquid cooling B-300. So we are continuing to progress. We're not fiddling with our terms. But what I can say is that our ambition is hundreds of megawatts between now and the end of '27. I talked about this. This is subject to contracting, approvals and delivery schedules. And this is not just APAC. This is also Middle East. We're opening up a new office in Saudi. We're opening up potentially our relationships in Dubai and Abu Dhabi, and we're looking at potentially building an office there as well with local talent. At the same time, I want to make sure that just to take a leaf out of Bruce's page, we have more than 1 kettle on the staff, right? Some of them are already boiling. We will announce the exact temperature when we are allowed to. I hope that sums it up.

Thank you. Next to last question. Can you elaborate on previous comments and the opportunities you are working on with NVIDIA?

Yes, of course. We work very closely with NVIDIA and all our OEM partners across all of our AI infrastructure bills, data -- current data center work in Indonesia, for example, and the wider ecosystem. Now I don't want to comment on any commercial specifics. Obviously, it's confidential. But the direction is very clear. Our credibility inside the NVIDIA ecosystem is increasing. We can execute. They know we can. We're not just stock. But what that means in practice is that we're well positioned as an operator and integrator across the full stack. GPU infrastructure, data center delivery, ongoing operations. This is important because these conversations have broadened our reach beyond any single site, beyond any single country. But that said, you're looking at different regions. East Asia, Southeast Asia, Asia Pac, Middle East, North Africa, Europe and so on and so forth. The same momentum continues to help us deliver at scale.

Now the short version is, we have strong relationships, very active deployment, expanding scope and only put the frames as and when we kind of -- the numbers are in play, and we're contractually allowed to do so.

And final question for this segment, gentlemen. Are you continuing R&D for video analytics and any plans to release an SDK?

Yes. But the SDK already exists. I mean, I'm not sure why people don't know that. But yes, the video analytics is live for us. it's not theoretical. We've been in this space for 25 years. This is our 25th year. We've built platforms such as the ICC TV. We've got the post event, the world's best post event. Let me put it this way and [indiscernible] already deployed for public safety and Smart City cases. We have built real time, real capable cybersecurity capabilities, including all of the seam and [indiscernible], all of the secure tunneling, lawful interception analytics, IoT and data analytics stack. And all of these are helping power our large-scale sensor and data ingestion platforms. Now that's important. Now what is an STK, STK is simply a developer toolkit. We've already done that. We have 1 and more importantly, most of our customers now move away from that to wanting an integrated a client-led platform where we delivered the outcome, not just subparts.

Example, we invest in SD-WAN most people know, we call it intelligent Director. Now because of that, it is a connected delayer that helps us run the distributed video, your cyber, your IoT, your SoC and your [indiscernible] visibility. It's a big market for us because we're looking at about roughly -- I think last year, it was about $8 billion in 2025, going up to roughly around $30 billion by 2030 to 2033. On the post quantum, I think, again, our approach to cryptotility and architectural readiness, we are designing our networking and our security platform to adapt as standards mature. We expect to be post quantum ready by the end of Q1 2026. Now this is important because the market is scaling very fast. We're looking at roughly about $6 billion by 2030. In plain English, yes, video is the eyes for us. SD-WAN is our nervous system, but the post quantum is the next immune upgrade. And like I said, we will be post quantum ready by Q1 of 2026. Craig?

Thank you very much for that, Jay. Let me now introduce John Roy of Water Tower Research, John will be moderating the analyst Q&A segment, analysts to ask your question, please click the raise hand button.

Thanks, Craig. John Roy. I worked for Water Tower Research covering technology companies. I think I look back just earlier today, I think I wrote my first report on Gorilla 2 years ago. So a lot has happened in 2 years, I'd say, for sure. So let's get right to the questions. If you will press on the raise hand button. We'll get to your questions analysts and we'll make that happen as soon as we can. Yes, it's been a crazy time. So while we collect these questions. So we'll first go to Brian from AGP.

Believe he raised his hand, but we're not getting there and along to the one.

Yes. John, can you find Brian's name in the list, go to the right-hand side there, and you should be able to over huge list of attendees Yes. number. Right. And then you should see, Brian, with his hand raised. Do you not -- you do? And then you hover over the right-hand side of his line there. Why don't we move down to David Williams, give him permission to speak and then ask him, when you get permission to speak, David, you should see it on your screen a notification then you would unmute your line and be able to speak.

Can you hear me okay?

Yes, we can. Fantastic. Well, thanks for doing this today and certainly appreciate the time and letting me ask a question here. But Jay, first question is what kind of get hard you have back there or I'm just wondering what you have behind you there.

This is an effect one. This is -- 1 of my favorites have been signed by some of the top man in the world, Rockstar in the world for personal friends of mine. So that's why I keep them a treasure them.

Very nice -- very nice. Well -- so I guess 1 of the real questions here is as we kind of think about some of the constraints across the data center, the ecosystem outside of just the logic of the DPUs, but also on the optical side, how do you think about sourcing and your supply assurance as you go to deployment -- do you have the same relationship with maybe that networking side of the supply chain as you do on the -- like the -- for the GPUs?

It's a great question, David. Yes, we do. So we are not just talking to 1 OEM provider. We are talking to multiple OEM providers across the globe and across -- and people who can actually provide us the allocation. That's on the NMDA side, whether it's your B-300 class, you raise Blackwell rack scale systems, NBL. Now we're talking about the next generation of [indiscernible], let's see when that's being released. So we will look at those working very closely with the likes of Dell, HPE, Qantas, Super Micro and so on and so forth. On the networking side, we have both relationships in our Taiwan it's been coming back -- coming from Taiwan. That helps us quite a bit. We have some deep relationships where, and this is very important, where you're looking at network switches and routers and so on and so forth, run of the mill.

Some customers are really concerned about the prices, so we can build and deploy and white label our own Google isolation. So where you go to certain data centers, you will actually see Gorilla networking switches and routers. But the others who come in and say, listen, we want Cisco, we work very closely with Cisco, you now a Cisco partner and we will deploy them at scale with them. So we're not looking at through a single lens, we're looking at multiple lenses at the same time.

Fantastic. And then maybe just as you think about the -- your place in the market and how you win, can you talk a little bit about your go-to-market and how you're able to win some of these data center type contracts, just how do you get into the market? And then maybe what is it that allows you to win versus maybe some competitors and you see competitors in the market?

David, again, great question. Listen, first of all, it's a great chance we do beat the drum role, okay? Our execution track record speaks for itself. In Egypt when we just started delivering we were 1 year ahead of schedule. Our lawful interception program, when we signed with the customer, it was a 3-year project. We delivered it under 2.5 years. The customer extended those contracts, and now we are going into multi-hundred million dollar projects and we're going to bid for that as well, which means that low for interception, for example, which we built about 2.5 years ago is now expanding from what was a $21 million contract to potentially well, the bid size will be about $200-plus million. That speaks volumes for our capability and our wins. On the public safety side, we have 1 progress we won projects across the globe, which is not a one-trick pony, but more importantly, why are we winning? We're winning because we're moving from ambition to urgency, okay? What has happened is that our engagement with NVIDIA with all of the OEM partners, all of the appliance partners, all of the other government agencies and so on and so forth, they are looking at it from a strategic infrastructure investment. It is not an optional requirement going forward. That means the shift has moved from discussion to committed.

They want to partner with a one throat to choke. The problem we have today is that you've got the data center builders, you've got the GPU suppliers, you've got the OEMs, you've got the racks. It's a painful process when you're trying to integrate that. So what we do very well okay, but from being a construction gig for us, we make sure that we are able to build and become the one throat to choke. And as we build that our customers gain confidence that Gorilla is the one we can work with, and we can rely on them to deliver quarter-on-quarter, and that has changed significantly as we evolve and mature in the market.

Add to that, David, is the other thing, we have this Tricard, and in the past, we work mostly with governments who were comfortable paying on a one-off basis as CapEx for them. And then we had worked with enterprises in the past as well, but what really unlocked the floodgates was we tried to be flexible with our clients. So they said, "Well, look, I don't know if I can pay for a data center or some of the other projects as a one-off, I want to do it over time. And we said, yes, that's fine. We will pay for the CapEx and then you pay us in an OpEx model for you. So that is building on the same technological [indiscernible] building a data center where you transfer it over to a government customer is pretty much the same as building a data center for a commercial customer where you then subsequently manage it. But the difference is basically the financing model had to change a little bit. As we've said 100 times in the last few months, we're very comfortable that the financing model works for us. and it also works for our clients.

But those are all of the reasons at the same time, why the data center market has become such a red hot space for us.

Okay. And just 1 last one, if I can, if you don't mind here. But Bruce, how do you think about cash flow as you start kind of moving forward and building and deploying some of these assets?

Yes. So -- the cash flow, really, we think about growth at the parent company. So for each of these, there will be an equity check that goes out to fund the CapEx. It would be sort of million-$20 million to $30 million each on the initial 2 deployments. We can comfortably cover that with the cash that we have on hand. We have about $105 million on hand today. And then those projects won't return cash to Gorilla for a year or so because that will go into a lockbox to pay down the project financing. But after that, they will start to generate some cash flow and then year 4 and afterwards, it will become a very interesting cash flow stream for Gorilla. So that's how we're looking at it for the data center projects where we're funding the CapEx. For the rest of the projects, we see the cash flow profile improving. So some of the government customers that we won last year and delivered on a very quick turnaround time in terms of paying us. So we were sort of out cash for 2 or 3 months with them. So we've collected about $13 million, $14 million this year just from 2 government contracts in cash collected. So I would say that if you look at the consolidated financial statements by the end of this year, you'll probably see a big number for CapEx, but that's mostly debt comes into an SPV that funds CapEx and the actual equity check that's coming out from Gorilla will be smaller and controlled. And then in 3 to 4 years, that will repay multiples.

As a quick follow-on to that. Are you finding that as you go through more and more Ds, you're starting to get recipes that you can follow in terms of not being totally bespoke every time. Or is it public from scratch new design every time?

No, actually. You're absolutely right, John. every -- we are learning very actively. I mean, listen, there are certain models which certain corporates want to build. And there are certain influences which they want to deploy. Once as with the market matures, our deployment and our thought process will also mature. And over a period of time, it becomes much more easier and quicker. So the go-to-market is much more effective and faster. But more importantly, we're also scaling at the same time, right? We're scaling -- as I had mentioned, when we started out, we had 1 data center team, which was in Egypt. Today, we have a data center team in Time. We have a large data center team in Thailand. We have a significant size data center team in India and in Egypt. We're building a data center team in Indonesia. And we're going to -- once we open up our office in Saudi over the next 45 to 60 days, will also start local hiring as well.

So we will have data center teams and deployments, and these are not just architecture. They're also managing all of the SLAs and the uptimes and so on and so forth.

Great. We'll go to [indiscernible] from Cantor.

Given the sizable pipeline that you have, what specifically do you see as constraints for like quicker conversion of the pipeline? Is it like GPU availability? Is it like customer readiness or capacity or capital, any of these -- any of these or all of these real bottlenecks today? And also like just a follow-up to the same question. Apart from the Freyr contract, are there any other larger contracts that you're currently focused on taking up a lot of your time, for example, some of the larger ones that you won in Southeast Asia and the smart school contract or the one in Taiwan.

Okay. So we'll break it down to 2. And Bruce, happy for you to chime in, please. See, what is constraining us today is, I think the lack of thereof in terms of memory capacity and delivery capability. If you look at the market today, the memory prices, I talked about it, they went up almost 60%, 70%. They're expected to go up more than 100% by the end of Q1 this year. So that's going to be one kind of bottleneck. The second bottleneck is also the speed of delivery. Obviously, some of the OEMs, they take longer. Some of the OEMs take much more lesser time. There's a cost differential always. So we have to make sure that we are delivering as we are supposed to in terms of the schedules which we build for the customer. Listen, at the end of the day, the customers game, okay? We have to make sure that we're delivering based on their requirements because they have a business to run. So for us, the reality is that our data center programs are fixed, the time lines are fixed, we have to juggle with the end -- with the OEMs and all of the related parties to make sure that we're able to deliver.

The other issue we are seeing, which is a bottleneck, is that globally, there is a lack of scalable data centers. So if you look at data centers today, in Thailand, for example, you've got about 4 gigawatts of data centers. they have allocated about 10 gigawatts of power. But if you look at Indonesia, 1.5 gigawatts, they want their ambition to grow to 5, but the probe-based lack of availability of land, lack of availability of the fiber, water, which is very, very important. And of course, your substations and your grid availability. So there's a lot of constraints when we look at data centers, but we are working meaningfully with every single government department, so we can move forward on behalf of the end customer, we shield them from all these issues and troubles. Bruce?

Yes. I mean, I would agree with everything you said. I think that financing for these stages is not a bottleneck. We -- our philosophy here is to dig our well before we're thirsty. So we've had conversations with lenders starting from the middle of last year. So we're confident that it's there. And we are building a syndicate of banks and private lenders that will be there for the next stage of projects. And then we're also -- we are getting a credit rating so that we'll be able to issue either debt in the -- sort of at the project level or debt at the group level to fund these projects. And then if someone wants to sign up for a gigawatt with us, then maybe financing will become a constraint, but that's a problem we'd be happy to have.

Sorry, we've actually had that problem. We've actually had customers come and say, "Hey, we want to build a gigawatt and well like stock. It's not going to happen overnight. Let's start with 20, 25, right? It's sometimes the ambition is a bit too much, and we've got to turn down the customers' ambitions as well. It's a fine line.

Yes. No, absolutely -- just a quick follow-up, if I may. For the first phase of the Freyr deployment that you detailed earlier in the presentation, when approximately does the financing needs to be all set up and ready for you to execute on your -- like the goals for this year?

Bruce, again, happy for you to chime in. You and I are in active discussions, but just FYI, the prayer contract is just a doorway and everything what we're doing in terms of selling and so on and so forth. But more importantly, we are building sorry, first, let me start. We're designing, building, operating it, and we're going to monetize it for the next 5 years. So it's a long-term relationship. And again, once you've gone into the process of building the data center for on behalf of the incumbent, they're not just going to walk away because remember, these are purpose-built customized data centers. They're not run of the mill where you can just host your data and so on and so forth. So we're not just hosting the racks. We're layering a lot of solutions as well at the same tact. Whether it's the video side of it, whether it's the data intelligence side of it, the cybersecurity, the network intelligence, your SD-WAN, and I talked about being post-quantum ready as well. Bruce?

Yes. So I mean, the financing is one where there's 2 phases. So once you have the contract with the customer and then the early -- that includes the scope of work. You go to your banking and say, this is my contract, are you funding it? What are the terms? You have a back and forth, you agree on the terms. And then the moment when it gets funded is when you have to pay, right? So that's usually we've made a -- you make a small deposit in order to buy your place in the queue. And then it's only when the goods are delivered and then you do the setup that you actually pay so you don't need to fund it until then. So that's a roundabout way of saying the project gets funded officially when we have to pay, which is the delivery moment for the GPUs and for the other equipment. And that's why, as Jay was mentioning earlier in the call, we haven't announced who's financing it in the exact terms because it hasn't been delivered yet. But we have term sheets, we have an agreement on the terms and we're progressing through the process.

I just also had one, are you finding any available facilities that exist already that you can go into? Or is everything pretty much from scratch?

No, no. We're not -- so most of our contracts today up until, let's say, the 70 to 100 megawatts are all colo facilities, we're just leasing them out. But now we are now in active conversations with very, very large players across the planet, who actually got either the financial muscle or the land muscle as we call it, the infrastructure muscle. And they have actually invited us to partner with them and create joint ventures with them so that we can actually build this. And we're looking at modular data centers. We're not looking at a 2.5 year built. We're looking at a 60-day build guaranteed with a 30-day testing. So we're about 90 days we'll be ready. So we are working. In fact, I just came out of a conversation yesterday with one of the largest players in the planet, and we were sitting together and figuring out how we build it, and they are looking at roughly 300 megawatts to be deployed by the end of this year and about 2.5 gigawatts across Southeast -- just across Southeast Asia by the end of 2027. And and they want us to partner with them at scale. So it's going to be high -- it has to be hybrid, unfortunately. Sorry.

Yes. Makes sense. So we'll go to the next analyst, David Williams from benchmark.

Thanks. I've asked most of my questions earlier, but I certainly appreciate the comeback.

Okay. All right. We go on to Mike Latimore of Northland.

All right. Can you hear me?

Yes.

Great. How are you guys?

No, bad Yes.

Jay, congrats on the Nobel Prize nomination. So just a couple of basics here maybe for Bruce. You have your backlog number. Can you give a little bit more detail on that, I don't know, types of customers or use cases or regional breakup?

So the revenue guidance that we see this year. So first of all, it's going to be -- if you take the middle of the range, $170 million, it's going to be about half enterprise and have government. The majority will be from Southeast Asia. The next biggest region would be the Middle East and North Africa. And then third place would be Latin America and the Americas. And then in terms of the overall margins, so the -- the way I would say it is in the past, the Gorilla model was 40 -- 35% to 40% gross margins. So the sort of security convergence, et cetera, our business would be at those levels. The gross margin for the data center business is much higher. It's sort of like 70%, 70%-plus. But there is a depreciation charge, which will appear on our financial statements. So think about the operating margin there of 20% to 25%. So I think if you take the midpoint of the guidance, 170 million, you would see a blended operating margin of about 20% plus. And there's a significant amount of operating leverage because as we -- as the revenue number goes higher, that just basically drops down because the SG&A won't have to expand significantly in order to -- I mean, the SG&A would probably go up 20%, and then the gross profit might go up 50%. -- if you had, say, a run from $170 million to $200 million, right? So there's operating leverage in the business model.

And then I guess, Jay, you talked about that the -- some of these data centers internationally are just more efficient costs less than in the U.S., Europe. How much of your pipeline, how much of your customer discussions are among customers that are sort of making a choice now, yes, we're looking at U.S., we're looking at Europe, but if you guys can deliver at this cost, we want to go with you -- like it seems like this is going to be sort of a tight wave towards your opportunity here?

Yes. I can actually talk about real numbers, in data centers today are becoming an anchor for us, okay? We design. So we're not just building the data centers or leasing them. We design, we build, we run, we host the power, we do all the capacity contracts and so on and so forth. On top of that, we stack the GPU as a service using all of our NVIDIA platforms. And that gives us what we call as recurring revenues. So you would see a seismic change in how we -- Mike, you've known us for a long time, we were a lumpy project-based revenue business. Today, we're able to go quarter-on-quarter and Bruce, I'm happy for you to kind of fill in the blanks later. But what is important for us today is that we're seeing demand accelerate. The maturity of these customers is quite significant. They know exactly what they want. They know exactly what design needs to run their workloads and they come to us with a very specific requirement. Each of these specific requirements have a certain lifespan and more importantly, they have a certain cost, okay? They have a budget. These guys are very smart nowadays. All these guys are coming to us are very smart.

So what do we do? We work and depending on which of these regions are able to serve them. So for example, if you look at Thailand, the cost of electricity, if you buy today, it's about $0.08 to $0.10. If you went on a wholesale model, you're able to bring it down to about $0.05 to $0.06. The cost of land is cheaper. The cost of the build is cheaper cost of resource is cheaper and cost of managing that is much cheaper. You go to Indonesia, you can bring it down from, let's say, $0.08 to $0.12 to about $0.06 to $0.08. And then the cost of running is actually the same, at the same level as Thailand. You're looking at other markets right now, like I talked about the Middle East, but the Middle East does not have very many trained resources compared to Malaysia, Thailand, Indonesia or even India. So what we're able to do is we're able to -- and that's why when I tell people, we actually have 4 centers where we can actually use people from. We're using the labor to move across these regions so that they can train them run them and turn them into long-term economics, Mike.

So where is the demand coming from? The demand is coming globally, whether it's Middle East, American customers or Asian customers. But at the same time, we're seeing a tidal wave here. That -- I think it's probably the right term to use, a title wave and a seismic shift towards the Middle East and Asia.

Okay. Great. And then I guess, Bruce, on the guidance range for the year.

The upper end of the range, should we assume that means that you sort of fulfilled this first phase and start to fill in the first quarter? Or like how important is the kind of -- like how should we think about what drives the upper or lower end of that range, I guess? The upper end as a rule of thumb would be if we deploy in the first half of the year, the first phase of the fair contract -- and the second phase is deployed, say, by the end of September. Then that would be the upper end of the range. The lower end of the range assumes that we deploy only the first phase, and it's towards the end of the year like September.

Okay. sorry, just to Mike, apologies. What we are doing is we're moving Q2 and Q3. In Q2, we are going from design to mobilization. And also we are preparing the deployment schedule as we speak. And then as we get all the GPOs, I mean, they're coming in phases. I would have loved to do a big bang approach and get all the 625 servers overnight. The problem is there's a delivery delay, so there's going to be about 190 to 200 servers initially coming in now and then the rest will come in sometime in April. And so what we are doing is that Q4 will then move forward to Q3 for infrastructure readiness, all of the scheduling and multisite coordination as well at the same time. So within the next few weeks, we would have finalized the design, site sequencing and all of the commercialization and then the deployment will start over the next 4 to 5 weeks.

And that may have just answered this next question, my last question. But -- so on the first phase, do you have like a specific site address like lockdown? And do you have the power there?

Yes. It's in Indonesia, just outside of Jakarta, it's all done locked in, signed ready. We're just waiting for the GPUs to land, and we're done.

The other thing, Mike, I would point out about the guidance is the upper end of the range doesn't assume any other wins in the data center business.

Well, gentlemen, I had 1 final question for me, which was on Amazon. If you could give us an update, that would be great. That would be an exciting project and love to hear about.

Absolutely. So the 1 Amazon project has been moving forward. As you know, we've already done our first proof-of-concept in Panama. We are looking to for concept. We are deploying some of the, what I call, containerized data centers in Brazil. We are working very closely with the government to make sure that we're able to get the sensors in place. As you know, we're doing our own R&D to build environmentally friendly sensors so that we can stream all of the environmental and health intelligence and so on. We've signed up with the satellite companies so we can start tracking at least from the Sky level, we're in deploying the LIDAR technology as we speak. And of course, Rodrigo and his team, they are currently fund raising actively so that we can start deploying at scale at the latter part of this year.

Great. I'll pass it back to RedChip.

Thank you very much, John. All right. This is information on how to get more information on Gorilla. You can call us at 1-800-RedChip or e-mail us at [email protected]. Please visit the information page created by Red chip for Gorilla. It's GRRinfo.com. There, you can view and download the investor presentation and fact sheet and register for news alerts on Gorilla. Watch small stocks big money, red chips program for insuring exciting small cap companies, every Saturday night at 7:00 p.m. Eastern on Bloomberg USA. Register for all Red Chip webinars at redchip.comvents. Thanks again to all our many hundreds of participants today, and thank you, Jay, Bruce and John.

Thank you, Craig. Can I just address the shareholders' relief?

Absolutely.

First of all, all our shareholders and our analysts, I really appreciate your time. Thank you. Thank you for your patience whilst we are rebuilding and thank you for backing us with. Whilst we do all the unglamorous work -- we do not take your trust for granted. Again, this is coming from my heart. Our commitment is very simple: keep executing, keep earning credibility, keep the riffraff of the fence and make sure that we create value for the business, we will be impossible to ignore. Thank you, everybody.

I'm your host, John Roy. I cover technology here at Water Tower Research. And today, I'm joined by Jay Chandan, the CEO of Gorilla. Jay, good to see you again.

Likewise, John, hope all it's been well with you.

Absolutely. I should mention that the company's safe harbor statements can be found on their website. Also, this fireside chat may not be reproduced or written transcript distributed without the expressed written consent of Water Tower Research. So with that, Jay, why don't we get started? And for those that don't know Gorilla, why don't you give us a quick overview of what the company does?

Absolutely. So John, first of all, thanks for having me once again. It's been a very exciting period for us. We've been deploying mission-critical AI security platforms as people understand it. It's video intelligence, post-event analytics, secure network intelligence, lawful interception, IPDR capabilities as and when the customers require. Now we're pretty much built up to scale and resilience as we build for national infrastructure. But what is very unique about it is what the AI infrastructure we've been building have moved from being purely what I call software and a solutions company, but into a sovereign grade AI compute with increased data center capabilities across the regions, whether it's Middle East, North Africa, Europe, Southeast Asia, Latin America, East Asia and so on and so forth.

Now the headline example, for example, is the 3-year contract we signed with Freyr for about $1.4 billion. And the first $300 million is currently being launched in Thailand as we speak. I'm actually sitting here right in Thailand right now. And the structure will lead to us building our AI infrastructure layer and the GPU deployments as we go forward. Now when we go through the motions of that, if you look at the other side of it, we have pushed hard on the foundations. We are strengthening our inferences across multiple accelerator types, and we're extending all our capabilities with enterprise customers such as Toyota as well. It's not just sovereign AI data centers. We've also advanced our one Amazon stack with our real sensors running on AWS with full operational capability layers with Knox and SSOs.

We've also continued to work on lawful interceptions. You've seen that we won actually 2 other deals in Southeast Asia, and these were big IPDR programs with the customers. And there, we were able to deploy our existing 5G AI solutions. At the same time, we started productizing our solution -- our intelligent network director solutions as well, along with our firewall capabilities. I can proudly tell you today, John, that we're now building our solutions for post-quantum readiness, which means designed today to withstand all of the security threats of tomorrow and more importantly, make sure that we're already not being too late. Now on the scale side, finally, we've created our Indonesia data center program. We're in the final stages of closing the SOWs and the SLAs, and we are moving from paperwork into mobilization.

Our Phase 1, as I mentioned, is $300 million of deployment. And in parallel, we're also now executing additional paperwork for the $450 million phase running alongside it as well. So we're working very tight time lines with our OEM partners, making sure we're working with NVIDIA to lock all the delivery time lines and so on and so forth and bringing best-of-breed of all of the GPU tranches in the Blackwell generation systems, including our GB200-class architecture. So what are we doing? What does Gorilla do? We're investing behind execution. That means we're building out our R&D teams in Thailand. We're scaling up our engineering teams in India.

We've expanded our footprints across Taiwan, Thailand, India, and we are increasing our hiring cycles in -- to match both the delivery pipeline as well as making sure that we're able to create a productization schedule so that we're making our deployments repeatable. That's important. We have our -- I'm also very proud to say that we will have our 2 new offices, one in Singapore and one in Indonesia over the next 2 weeks. We'll be hiring about 20 new people in our Jakarta office over the next 40 days, and we'll also be building our India data center team as we speak. So long and short of it is we're not trying to be noisy. We're just trying to be inevitable. That's Gorilla.

That sounds like great progress. Speaking of progress, I mean, obviously, Amazon ONE is a big deal. And I believe someone won a Nobel award for Sustainability -- or I should say, was a finalist for the Nobel award there. Maybe you could give us a little insight and color on how that all came about and how crazy was it?

It has been crazy since then. It's really difficult to overstate, John, what it means, what the recognition means because you don't -- nobody dreams of waking up one day or being born and saying, listen, I want to be part of the Nobel Sustainability Club. Now people often underestimate the weight behind it. This is not one of these awards where you just wake up one morning, you get it, you have a nice dinner and everybody goes home, frame certificate, logo, blah, blah, blah. No. This was a formal nomination for 2025 Sustainability Awards in the category of leadership in implementation for Jayesh Chandan. Now what that wording really matters because it's not just about the good intentions or the clever decks we prepared, it's also about actually building on a national scale where sustainability is engineered into the infrastructure itself.

Now the Nobel Sustainability Trust, everybody knows about it is an institution that has changed and shaped the global thinking on responsibility, right? I mean when you say Nobel, everybody talks about responsibility. But it's also about how the progress is made for the future of this planet. And when I met with the Nobel's, I spent a lot of time over the last few months with them. They are absolutely on top of it. They breathe sustainability. So for me, there's no shortcut to getting on top of that pyramid. It's not the way you can just bluff in and weigh market your way in. For me, it was very meaningful and most importantly, it was also very surreal. Why? Because I built my career with building complex systems across the world, whether it was Nigeria, whether it was Thailand, whether it was Latin America, whether it was India, very complex markets, and I was never chasing applause.

But to suddenly find that our work has been acknowledged by an institution associated with the Noble legacy. For me, it was about a pause and think, okay, what does that mean? Maybe all those late nights I did, all those stubborn decisions weren't completely irrational. Now for Gorilla, it was a validation. What does it mean for Gorilla? It tells the market, we're just not talking nonsense. We're not talking about sustainable AI. We're deploying it at national scale, right? Whether it's the ONE Amazon, whether it's the Taoyuan Airport, whether it's the Thai projects, whether it's the India investments we're currently making and looking going after AI across the Indian subcontinent, I often say sustainability only counts when it survives the contact with reality. So for me, the challenge is not about being nominated, it's about being recognized. And frankly, I wouldn't have it another way, but it makes me even more now think larger than I've ever done before.

Well, congratulations again. You certainly deserve it.

Thank you, sir.

Now you have continued to make investments in other ways. I believe you made an acquisition recently or closed on a deal, Astrikos.

Astrikos. Yes, we invested in the company. Yes. So we did not invest -- I've been watching all the blogs and so on and so forth. And I've seen people talk about, hey, it's just another fancy logo. No, it's not. We invested in India because it's the fastest moving theater right now for AI adoption and national scale digital infrastructure deployment. Now what does Astrikos do? Astrikos is building AI-driven platforms, and built a whole product suite aimed at turning infrastructure into operational outcomes across different verticals. What most people don't realize is that they actually have a whole bunch of product suites, which is now deployed in various cities and states in India. They have a contract with NEOM, and they're also very actively engaged in the United States.

Now so what does that do? Their product -- they've got a whole bunch of products, Omnific, Cognus, this company has product called Kolaz, KIM and so on. These are all about measuring impacts across different data collection platforms so that they can take -- make decisions at scale. Now what is the biggest challenge for us when we went into India is that there were 3 different market categories we wanted to address: AI compute, data centers and more importantly, sovereign security. Now if you look at AI as a strategically compelling story in India today. The demand according to, I think, Grand View Research, in 2024, they were at about $15 billion. But by 2033, they're growing to more than $330 billion. That's a 40% CAGR, okay? I would be a fool to ignore that market and that incremental growth. But on the other side, if you look at data centers, they're growing from, what, $9 billion, $10 billion, again, according to Grand View to about $30 billion by 2032, 2033.

Again, that's something we cannot ignore. And there's also proof in the pudding. If you look at the hyperscalers, for example, they've actually proven the thesis. Microsoft recently announced, I think as recent as about 3 days ago, announced a $17.5 billion investment into AI in India. Amazon has already planned more than $35 billion of investment. And Google just recently committed, I think, about $15 billion or $16 billion. So what does that mean for Gorilla? What does Astrikos mean? We're actually building a serious delivery engine across India and Southeast Asia, so that we can scale up demand.

Now Astrikos provides us a complementary product portfolio where we can actually go out to the market, not just in India or the neighboring regions, globally where our data center programs can actually provide compute foundation for the AI adoption rates, which the globe is going through right now. So we're investing in India purely because India is where we believe AI will become infrastructure and infrastructure will become national capability. So that's Astrikos that's why.

Excellent, excellent. Yes, there's been a lot of news flow about India, certainly for sure. So you've mentioned, obviously, a variety of projects. Maybe if you were to take a step back for a second and just kind of highlight the top 3 or 4 that you see that are going on right now that are -- I'd really like to hear about differentiated stuff, right, stuff that you really think makes Google shine.

Yes. That's a really good one. You put me on the spot there. I'm trying to figure out the 4 -- okay, let me give you 4. The short answer for me would be we have execution and we have references, okay? Now as you know, we signed a very large project with the government of Egypt. At that point in time, people are like, "Oh, Egypt, come on, what's happening there? " Now I can tell you, the project is running at full speed. We've built our Air Gap network program. The mission-critical sovereign infrastructure is running. Parts of the data center environment have already been built. They're ready, tested and the program is now progressing across all of the FAT, which is file acceptance testing, rollout planning and all of the delivery milestones are being met.

And what is more important is that the customer is paying us on time, proof in the pudding, right? The second one is our 5G lawful interception. Now in Taiwan and Southeast Asia, we had a lot of these wins recently. And again, I don't think so people understand we were the first 5G LI solution to be deployed globally, okay? This is a time when people didn't have a product at all. Now we built these products, and these are not isolated projects. They are national scale platforms where we're delivering in highly regulated environments, where performance, security, compliance are completely nonnegotiable. Now when you look at these deployments, we're all live and operating at scale, okay? Why this matters is because if you look at all these 5G programs across the globe, they're either a white paper or they are proof of concepts. These are not proof of concepts.

Governments and telecom operators, they want to talk to each other. But when you deliver at that level, word travels really fast. And if you look at the other 2 projects, which we recently signed, they were word of mouth. They reached out to us and said, we're seeing this direct influence on the government of Taiwan, can you help us out, right? And so -- and the third one is on the AI infrastructure. Now we had a lot of publicity on the AI infrastructure side.

So the first program we are kicking off is about $300 million, as I mentioned, and that's the first phase. And that's on the way. The mobilization is already kicking off. In parallel now, I can tell you, we did this today, we have now started directly the second phase of $450 million, and that will move alongside. But of course, we have to go to the SOWs, the SLAs and so on. And we finished finalizing the next steps on all of the different phases with Freyr today. We sat in our offices, we closed all of them. So what is -- if you look at what is consistent, the pattern is very consistent because we're now delivering at national scale. We're no longer becoming a POC company. We're becoming a global reference. And that's exactly what is happening today in terms of where our projects are.

Great. That's some very good highlights. So now for the number’s guys, what do you think you're going to be able to do in 2026 in terms of -- I mean, I know you guys have a lot of cash ready to go to use. You got a lot of cash committed. You're going to need investments, you're going to need to make investments. Give us kind of a flavor of what you see 2026 is going to be like, not guidance, just kind of what is it going to be to you?

Absolutely. For me, okay. So 2026 is about scale for me with discipline and personally, a little less caffeine for our finance team. Don't tell that to Bruce. He's not here today. He loves this coffee, by the way. See, revenue -- for us, revenue with real visibility is no longer a wishful thinking, okay? We are -- I know we give a broad guidance of $137 million to $200 million, but that was because we were being very prudent and very factual with what we have. We have $85 million of signed contracts and a backlog already, which we have to deliver towards. Now that range is driven by timing, not by demand.

We're seeing a broader customer diversification across the globe for us, not just in Asia. So we're trying to reduce the concentration risk. So if you look at how we evolve as a company and you look at our concentration risk, 2026 will be the year of what I call reduced concentration across different customers, across different industries, across different geographies. Now the Freyr timing for us is also a swing factor. Why? Because the only real variable in the guidance for us is the timing of the first Freyr deployment, which is happening in the first half of '26. Our numbers deliberately assume minimal contribution from the Freyr in the other phases of the projects and the later phases of the projects as well. So think about it this way, optimism for me is fun, but I think discipline, it actually pays the bills, right?

So Freyr deployment now changes for us the scale of the company itself. So once the Freyr programs are fully deployed, we will have what is called as a very strong annualized revenue, predictable month-on-month, quarter upon quarter, which means Gorilla stops being a growth story and starts becoming a steady infrastructure platform. That's a very key message, which I wanted to kind of deliver. But as that happens, margins improve, right? The AI infrastructure ramps up. Now data centers, for example, being a very different margin profile. When on balance sheet, we're expecting about 75% gross margin, 60% to 65% EBITDA. But with a 20% to 25% operating margin, what happens is these assets sit in SPVs with a nonrecourse debt. And this is something which the market is also not able to understand and visualize because we're not putting this -- whether it's debt or equity, we're not putting this at least on the debt on the balance sheet. We're getting the upside without turning the balance sheet into a stress test.

Now we have over $110 million of cash today. We have reduced our debt well below $15 million, which is kind of making us quite -- and we haven't sold our asset yet, and our asset is now valued at about $25 million, $26 million. We have a further $22 million -- actually $30 million of collections expected over the next few weeks. That gives us the flexibility to execute without having to tap into the equity market every time we build something large and expensive. Now capital intensive, yes, reckless, no. Okay?

Most people are expecting they're like, hey, you've signed this $1.4 billion contract, when is revenue coming, right? There is upfront cash burn because GPUs don't grow on trees, right? And paybacks are within 2, 2.5 years, and we're seeing financing offers at 85% to even 100% loan to cost, okay? We've actually got term sheets. So equity is already in place for the first 2 deployments and leverage only increases when the revenue is contracted. So I think that's the key message we want to leave to the market, less equity, more leverage, nonrecourse debt, off-balance sheet SPVs. That's kind of where we are, and that's the outlook for '26 for us.

Great. Well, Jay, we're kind of running at the end of our time here. We're going to have to leave it. I want to thank you so much for joining me.

Thank you, John.

For investors, if you want to learn more about Gorilla, please visit their website or access the research on the company that we have at WTR at www.watertowerresearch.com. I want to remind everyone that the views expressed in this fireside chat may not necessarily reflect the views of Water Tower Research LLC and are provided on the informational purposes only. This fireside chat may not be distributed or reproduced without the written consent of Water Tower Research and should not be considered research nor recommendation. WTR is an investor engagement firm, not a licensed broker, broker-dealer market maker, investment banker, underwriter or investment adviser. Additional disclaimers can be found at watertowerresearch.com.

Good morning, and welcome to the Gorilla Technology Group's Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] 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 about 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, but 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, $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 also in terms of the -- it was helped by a fundraise that we did in July.

In terms of where we are as a business how and we're performing, 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. And then 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 that 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 or 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 basically, this is how we forecast guidance is based on contractual backlog, which is the revenue that we expect to realize from signed contracts and then also where we have delivery time lines and specified contractual milestones.

In this case, we have a signed contract. And in the case of 2026, we have a large 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. So that means over $400 million annualized. And that will be when up and running, $400 million annualized. But the rollout will be through 2026. So the contribution will hit starting in 2026, but it's still -- it won't be the full amount.

Nonetheless, we also have a strong pipeline, as we alluded to, which Jay can talk about in a second, which makes us optimistic about hitting the full year guidance for 2026. A couple of other things to point out about 2026 is we have been talking to the market for a long time now about where we're going to grow, diversifying the business and derisking it.

What we've seen is that the contract wins and then the pipeline is mostly in Southeast Asia, which would lead to us hitting our target of over 50% coming from Southeast Asia next year. It's also a good mix between government and enterprise. So we'll be diversifying and reducing the government share of our revenue. And then the corporates are investment grade and then the government clients that we're talking to or that we've converted are investment grade as well. So we see an improving credit quality from our end customer.

All of this points, I think, to an improving business mix. a diversified revenue base on all measures and then improving client quality. The last thing I'd like to do is Jay is a bit too modest to do this, so I'll do it for him, is the track record is now piling up to the point where I think we have many proof points. When this business went public in 2022 via de-SPAC, the revenue for that year was $22 million. The guidance for this year is $100 million to $110 million. So that's obviously a significant increase in a short period of time.

Looking at the guidance for next year, that marks 2 things. One is it's a large absolute increase. The second is that the percentage growth rate actually for next year would be an acceleration over the percentage growth rate for 2025. So it's, I think, quite a testament to the management team to see an improvement in the revenue growth rate and also after a 5x increase in revenue since going public.

And then that's not the only highlight. several other highlights. So first of all, we have, as I mentioned, over $100 million of net cash. This is after being in net debt when we went public. We had a very painful or even toxic financing mix earlier in 2022, 2023, all of which has been cleaned up. So the cap table is almost all common equity.

And then when we talk about winning new contracts now or executing on contracts that we signed, looking at the balance sheet now, we have the ability to fund significant new deployments from our own resources and then from project level finance that we have on the table from several banks. So we anticipate overall a good year to finish up in 2025. We're quite excited about the outlook for 2026.

And then with that, I'd like to turn it over to Jay for anything else that he'd like to add about the outlook, the pipeline, et cetera.

Thank you, Bruce. Yes, it was a very good quarter, rather, 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 on what Bruce talked about and clarifying some of the proof points to all the naysayers out there, 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 to be at minus $6 million. We did a positive of $4.4 million. That's a big swing.

And our adjusted EBITDA was about $5.6 million estimated, we did $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 the Gorilla actual was about $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, which is 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 end of this year.

What we also had modeled for 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 ferry dust, not if you squint, you can't see it, so on and so forth. This is proper profitability. We ran the business efficiently. We delivered on big projects across the region. We are delivering big projects across the region. We controlled our costs, but most importantly, we generated a real operating profit.

This is not a one-off. This is what we call discipline. Second, we did this at the same time, we were scaling at pace. Now most companies only turn profitable when they stop investing. We turned profitable while executing national infrastructure programs across Southeast Asia, Middle East, LatAm and so on. Anyone who has ever worked in this sector will tell you that is not just coincidence. It is pure operational muscle.

Third, we have visibility. And when I say visibility, I mean proper visibility. The $1.4 billion Southeast Asia data center project is not a rumor. It's not a letter of intent. It is not a win. It is a contract and is underway already flowing into our scheduling and revenue plans for 2026 and onwards, of course. The first phase alone provides for $100 million of annual revenue for the first 3 years. This is the definition of structural.

Now people also asked me about the pipeline of $7 billion. I'm going to show you this is not something we found under a sofa cushion, okay? It has come from governments, telcos, 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 is increasingly indispensable.

Now our balance sheet is also a strategic weapon for us. Over $110 million of unrestricted cash, $15 million plus of debt and working with major partners like Telstra with us on data centers, we are not just hoping to deliver, we are capitalizing to deliver. And finally, with the deepening partnerships with the likes of Intel, Edgecore, HPE and NVIDIA and expanding our sovereign 5G local interception cybersecurity platform, we're not a one-hit wonder. These are partnerships that stick because we execute.

So just to go back into the question-and-answer session now, we're 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 ahead of us, particularly on AI data centers and national infrastructure programs is significantly larger than what is formally in the guidance today.

With that, I'd love to turn this over for question and answers.

[Operator Instructions] 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, Mike.

For 2026, we've guided a revenue range of roughly around $137 million to $200 million. This is built on only 2 things. One is our contracted backlog with very clear delivery milestones. Number two, the first phase of the Southeast Asia data center project, which alone contributes $100 million from '26 to '28.

Now there is 0 revenue in that guidance from databases of the $1.4 billion program and 0 from any other new mandates that are being structured. Now the reality is that the remaining phases of the AI data center program are much larger than the Phase 1. As the time lines and the site consequences are finalized with the customers, we will then extend both our '26 and '27 revenue base quite materially as well.

Now on top of that, as you know, we've also built a pipeline. Inside of these are several national projects in late stage that also touch data centers, public safety, network intelligence, our 5G offer inception programs and so on. None of that is in the current guidance of 2026. So the question you've asked me is the range we have given you is based on the backlog driven by a base case assumption. It is also dependent significantly on some of the very important issues we're facing today.

One is material shortages of semiconductors, deliveries from likes of NVIDIA, Dell, HPE, Super Micro and so on and so forth. But that said, the upside from additional AI data center phases and new sovereign mandates will sit about all of these, and they will crystallize and therefore, they will become our future guidance as well. So I personally believe that we published a very sensible conservative number, and that's why we have deliberately left the rest out of them for now.

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

Sure. Bruce, do you want to take that?

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

Okay. Good. And I guess just last one for me. The -- what -- can you provide a little more detail on the deliverables on this large contract in '26? Like what is the thing you're going to be delivering in the first quarter and throughout '26?

That's a good question. So the right way, Mike, to see the first $100 million is the run rate it builds. Personally, for me, I think most people expect that you've signed a $1.4 billion contract, it's a light switch and the revenue starts flowing in. No, it doesn't work that way. I'm sure you know data centers very well. We've been communicating on this for quite some time.

The first one is basically about 6 to 8 megawatts. That's several hundred high-density AI rack. And we do not like them all in one day, as you can imagine. They come online in plan based as the power, cooling, all of the network zones are commissioned. So revenue ramps up in each batch as they are energized.

Second, when you look at the GPU capacity, that becomes a very important factor as it follows in through these waves. As the racks go live, for example, we drop in the cluster through our NVIDIA and partner ecosystem, which drives up the GPU as a service usage line.

Now on top of that, we stack our services over a period of time. So not all at once. You can't just do a big bang approach. It's video intelligence, say, for example, for cities, transports and borders, big data analytics, building your large language models for both the government and telco, bringing your inference engines and so on, your cybersecurity, your network appliances and intelligence platforms and things like even the environmental intelligence and smart policing. So as the national workloads move into the platform and the utilization grows, typically from 30%, 40% all the way up to, let's say, 70%, 80%, that deepens our revenue at the same time at the same levels as the physical capacity.

So for -- just to take a leap from what Bruce said earlier, if you want us to be doing about $300 million to $400 million steady-state revenue, the GPUs all need to be in motion and be sinking harmoniously at the same time. So the part to that is a controlled ramp, as I said, is not a big bang. So we're anticipating, again, working very closely with NVIDIA on this. We're anticipating that we will get all of this commissioned and to go live 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.

And I guess if you kind of think about the risks in the market and maybe from the supply side and just the market dynamics, what do you think -- I mean, how would you gauge that from the midpoint of the guidance up to the upper end? And I would suspect that there's more upside opportunity than downside risk. Is that fair to assume?

David, it is absolutely fair to assume there is more upside. Why? Because see, let me give you the risks to the guidance. I think there are 2 parts to your question. First is the timing of the customer deployment. Large AI infrastructure and data center programs rely on client site readiness. There has to be site access, as you know, the market very well, power allocation, import clearances, customer procurement cycles, they can all shift from one quarter to the other. And even a slight change in a week or 2 changes that significantly.

Number two, your supply chain constraints are also -- there is a big challenge today. If you look at the demand, there's a high demand for GPU servers, not just in the United States, but across the globe, right? And then if you're looking at things like networking equipment, they can also create longer lead times. I don't know if you've seen recently, the price of memory has shot up 40% in the last 2 months.

Then you've got the things like regulatory and compliance approvals, you've got things like project phasing on multiyear platforms. You'll have to take -- we take into account even geopolitical sensitivities in certain regions like Southeast Asia, Middle East, Latin America and so on and so forth. But then if you look at the upside for us, I did talk about it previously. For us, it's about when these programs come live.

Now our aim is to get all of these live by 2026 and make sure that we drop all of these clusters to our NVIDIA partnership and our partner ecosystem and make sure that we drive the GPU as a service usage line. Now once we've driven that -- and remember, these are all purpose-built data centers. That means there's one customer occupying 100% occupancy, okay? That means our revenue would hit scale as soon as the switch is switched on. So what we are trying to do is we are working very closely. I mean, I did mention to you the risks. But taking all those risks into mind, we're also looking at the upside. And we want to make sure that our upside actually helps negate the risks on the lower end. I hope that answers your question.

Can I add something to...

So a couple of other things, David, to keep in mind. The first is the data center opportunity -- the data center contract we have is an umbrella contract with Freyr. When we announced it, the $1.4 billion was based on the scheduled deployments that we had then. there is always the possibility that there are more deployments added to that. So that would be another source of potential upside.

The second thing is, of course, while we're talking about the contractual backlog, and we talked about the data center side, we haven't talked about anything else. So Gorilla is still actively bidding for government contracts. And so we put in several bids recently, and we're staying tuned for good news from a couple of governments in Asia.

The other thing is that we've talked many times about one Amazon and some of the MOUs that we've signed with government customers in the past. None of those are in the guidance now because they haven't yet turned into a date and an amount. But as soon as we know and have crystal clear vision on the date and the amount, then those would also be added to the guidance for next year. So it's not just about delivering everything from the data center contract, although that's the biggest mover. There are many ways for Gorilla to win next year.

And then maybe, Bruce, is there a way to size kind of the magnitude of your backlog? You've talked about a few things. You don't have the amounts or maybe even dates to. But if we were kind of thinking about your total backlog and kind of what you're anticipating for next year, how do you -- how should we size that?

So the backlog for us is -- we go with a strict definition. So $85 million is the backlog for 2026, where we have the exact date and time and it's signed and it's being implemented now. Then we have, as we mentioned, the data center contract where it's signed, it is being implemented, but the exact timing of the deployment is still -- we have a good idea, but it's not definite yet.

As Jay mentioned, there are some [ DUCs ] that we have to get in a row or there are other people that we have to work with before we can define that. The pipeline is where we have a qualified lead, where we think that they'll make a decision in the next 3 to 6 months, where they have budgets, but that doesn't have a signed contract or with an amount and a date next to it.

So there's 2 parts. One is the backlog is very strict. And then the pipeline for us is really about converting from customer either where it's signed, but it's not amount and dated or where they sign up and then they sign a contract and we know the amounts and the dates and can then move that into the backlog.

If I add some color to that, David, as well, the pipeline has grown rather enthusiastically, if I may. If it grows any faster, I think I might need to send a congratulatory card for myself. But that said, the deals are also very mature.

If you look at what we did a couple of years ago and where we were last year, we were building POCs, we're signing MOUs and so on and so forth, whether it was part Asian in the U.K. or the Middle East, LatAm and so on and so forth. The data center project has accelerated beyond our expectations. And I don't want people to think that we're only building the data centers.

There's a lot of ancillary support services we provide on top of that as well. So the $1.4 billion, for example, was only a catalyst. Once governments and telcos saw that we could deliver sovereign grade AI infrastructure, that basically kind of triggered a surge of interest.

Now without giving names, the demand wave behind the FRR is significantly larger than Freyr itself. That is one of the primary reasons why our pipeline is well north of $7 billion. Now if you look at the GPU infrastructure, it has moved away from ambition for us to urgency. Through our engagements with likes of NVIDIA and Edgecore and including our own appliances within the kind of the government, we're seeing that strategic infrastructure as an essential, not optional.

So now what has happened? We've also started working with the likes of Telstra in Brazil who's providing capital and looking to build some seriously large data centers as well. So these are all kind of whole country platforms as opposed to just incremental pilots.

And then finally, what we are doing is that we're making sure that we can formally count a large portion, let's say, even if it's 20% to 30% of the $7 billion to be signed very quickly in 2026. And that allows us to actually be much more confident of our multiyear expansion. So in short, David, the opportunity is pretty comfortably substantial for us, but it's also growing at the same time. And it's not definitely a single year anomaly.

Okay. And one more, if I may here. Just if you kind of think about your competitors in the market and the 800-pound Gorilla, so to speak, you're competing against there. Why are they choosing Gorilla? What gives you the edge? And why are you winning?

That's a good question. Why we're winning? I think we've proven ourselves, okay, to where we are today. We believe that we work with governments to make sure that we understand what their requirements are, what their commission requirements are, what their ecosystem requirements are, and then we help them build national workloads.

Now Gorilla has been in this space for a very long time. As you can imagine, we've been here for 24 years. We're going to be celebrating 25 next year, right? We are a full stack AI operator. And I think I kind of talked about this in my first speech at the NASDAQ, and I said we want to be an AI stack operator. We design the architecture, we build the data centers. We integrate the GPU stacks. We operate the platform, and we stay as a long-term partner for the governments and telco.

Now apart from that, they also -- we offer these customers of ours, both enterprise as well as the government level, sovereign control and predictable economics. And that is very, very, very important because our customers know exactly who runs their infrastructure, who carries the responsibility for their uptime and performance. And then finally, it's about capability.

Now as you know, we've been delivering national cybersecurity infrastructure. We built 4 data centers in Egypt for our $270 million contract. We're executing multimillion-dollar projects, national projects across Southeast Asia, Middle East, LatAm and so on. What has happened is we are moving faster than our competitors.

Our speed of execution, our ability to structure these projects and our operational discipline is making us the preferred partner where you understand this probably better than most people do, AI infrastructure cannot fail. It does -- it cannot fail. It just cannot fail. And it has to be with people who can have a very strong operational discipline. I think that's the responsibility we take. So we will build, operate and manage responsibly. So think about it this way. Everybody is trying to sell buildings and servers. We're trying to sell outcomes. That's it. That's as simple as that.

And one thing to add on to that, as the numbers guy, is when I was investigating why we win, so to prepare some investor materials, all of that came out.

The other thing is that given our history and our relationships with hardware vendors in Taiwan and then using our own software to create appliances out of the hardware, we actually deliver a significant cost savings over a competitor. I mean, obviously, the biggest cost item will be NVIDIA GPUs and there's not much flexibility. But on items where there's flexibility, we can deliver like a 30%, 40% cost savings with better performance, and that will reduce the overall cost of the data center by 5% to 7%. And 5% to 7% may not sound like much, but when you're talking $1 billion data center, that's a significant cash savings.

So not only is it sort of everything that the customer is looking for in terms of sovereign data infrastructure, faster time to market, but it's also cheaper. So in the end, there's enough that stacks up, it becomes very difficult to look at a competitor by comparison.

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

Obviously, a lot of discussion around '26. I want to step back for half a second and look beyond that. And kind of these questions are related.

One is, do you need to grow your sales team to turn that pipeline into backlog? And can you give us some color on the pipeline beyond '26? And the last thing is, what are you going to plan to do with all that cash? Is it for growth? What's it for? Just kind of curious.

That's really, really good. No, no, that's a good question. You caught me off God there. No, but listen, I can tell you that my pipeline is $7 billion, and I can sign all of these deals, and it's all going to be hunky dory. It is not. It is going to take its own challenge. It's got its own challenges.

Am I going to expand my sales team? Our sales teams are already well established. We have more than what, 250-plus people today. Full time, we have more than 200-plus contractors. So we're stretching our bottles right now.

The sales guy -- there's one sales guy who gets everything done, which is myself. I make sure that I'm there in front of every single customer, every single project. It doesn't matter whether it's a $1 million project or a $1 billion project, I make sure that I'm there so that I can give them the confidence in the guidance.

Where are we aiming for -- I think you kind of touched upon this as to what your -- what the future looks like. For me, personally, right, if the programs and partnerships in front of us land the way I expect it to be in the next, let's say, 3 to 6 months, I would like us to be -- and this is my personal target, please do not assume that this is going to be the company's target, around $500 million of annual revenue by '27. That's not a formal guidance, by the way. This is my target for what the platform is capable of delivering.

Now that's what I am focused on. I want to get there, but we need to make sure that we've built all the LEGO blocks in place. to make sure that we're no longer a project shop, make sure that our pipeline is real and growing, make sure that we can have more cash and that it meets our ambition. And more importantly, it talks about what kind of acquisitions we're also able to do so that we are able to support. We need teams, we need people.

Just to give you the scale, we've gone on a massive hiring free in Taiwan. Thailand is almost what, 60-plus people. We are looking at India. We've got about 150-plus new recruits going on in India. And we're looking at acquisitions as well for the first time in India as well as in the U.S. So that's -- keep your eyes peeled, and I'm sure we'll be able to provide you more updates in due course.

No, that sounds good. And the cash, maybe, Bruce, can you give us some highlights on where that cash might be headed?

Yes. So for all of the major contracts, there is a capital needs from Gorilla side. Sometimes with government customers, that can be for performance guarantees and for working capital.

For some of these data center projects, we have to fund the CapEx upfront and then deliver it to the customer. In this case, we are in active negotiations with banks. I mean, Jay and myself are in New York this week, meeting with banks. So we have term sheets on the table from lenders, which will finance the vast majority of it. But just like getting a mortgage for a house, there's an equity component and the equity component would come from the balance sheet.

We anticipate that we have more than enough cash on balance sheet now to fund the first deployment or 2 and hopefully even more than that. Like I mentioned, the business should generate substantial cash in the fourth quarter. And so that will see us into much higher revenue numbers in the coming 3 to 6 months.

Our next question comes from Brian Kinstlinger from Alliance Global Partners.

Congrats on all the business development achievements over the last few months. As it relates to as it relates to the Freyr contract, I'm curious or I assume the margins are substantially higher than the operating margin of your existing business.

The offset is the CapEx side. So the cash returns maybe aren't what the EBITDA margins are, but the EBITDA margins are super high. I just want to see if my assumption is right.

You're right, Brian. First of all, good to hear from you. First of all, Freyr is not a construction gig. For me, it's a long-term AI infrastructure relationship across Indonesia, Malaysia, Thailand, Vietnam, Philippines and so on.

Now what we are doing is we're designing, building, operating and monetizing it over the years. Now once that data center is live, we're not just there to host the racks. We're also layering a lot of services on top of it. So video intelligence, like I said, big data analytics for government, cybersecurity platform, smart policing and so on and so forth.

So for me, Freyr is the doorway. The real value is what we sell on top of it and everything inside that footprint. So what we -- when you look at it from that perspective, yes, you're absolutely right. It carries a higher margin, your EBITDA is much higher. But in terms of cash generation, it might actually because of the CapEx -- extensive investment of the CapEx, it's going to be slightly full cycle.

But what we will do is we will then deploy our own operations team. And more importantly, we will also apply our own stack of our solutions on top of them, helping them go from building large language models to inference engines and moving up the value chain going from let's say, H100 to 200 to GB 200, GB 300 and what comes after. And so look at it this way. For me, building data centers is only one part of it. Think of us as creating, curating, hosting and protecting your data. That's what we do.

Great. And then as we enter 2026, regarding your first large contract, which was the Egypt Smart City contract, how do you see the economics change in '26 versus '25 in terms of revenue? Are we increasing, declining, kind of steady state? And then how did the mix change from '26 compared to '25?

That's a really good question. So if you recollect about a couple of years ago, Brian, when we first spoke, I said my first job was to derisk the business. And it was to derisk our delivery profile in 3 ways.

I mentioned this to you, and I'm going to stick to my guns here. First, we secured the contracted program. Once we did the technical validation with the government of Egypt, we then score our revenues and so on and so forth. And as you know, 95% of our revenues came from government customers. So what we did was we wanted to move away from projects to long-term milestone-based predictable collections so that our cash exposure is limited.

It took us about 1.5 years to build that. And today, we're seeing that we're able to strengthen our balance sheet, but more importantly, we're able to reduce debt. Now what has happened, and this has allowed us to give us the breathing space to reengineer our business and to build our, what I call, capabilities at the same time.

So look at it from having project-based schedules and programs to a full fledged deployment. These factors kind of helped us reduce our execution risk, revenue timing and financial risk. So going into '26, I can say with confidence that we are able to now have a more predictable, more stable quarter upon quarter as opposed to what we had previously. that answers your question?

Yes, somewhat. I'll take some of it offline. And then I'm curious, you had a number of MOUs, including Amazon One, there's a smart city contract. Any update on your progress? And I don't need to go over each one of them, but maybe where you're seeing more progress headed towards the finish line of any of the MOUs that are very large.

Yes. So the One Amazon project is going full steam ahead. As you know, we've already completed the proof of concept in Panama, and now we're running into Mato Grosso. You saw the signing happen sometime last month. So there's an initial $100 million program where we have received -- we expect to receive a good chunk of that in our tech deployment.

Now of course, there are lots of issues we need to worry about because we have to worry about the sensors, the way they deployed, how every active is being monitored, how it becomes a stream of environment and health intelligence and so on and so forth. And these are monetized for decades. So we've already started work on that. It's growing, and that is not part of our guidance for 2026. We've also signed, as I said, with our MOUs with the likes of nTelastra, for example. This is not a single site. We're talking about 120-plus megawatts to be done over the next 24 months.

So that also tie that to our Freyr project and so on and so forth, we're expecting that to also convert into a portfolio of other AI infrastructure projects, which are repeatable. We're also working very closely with the projects, and I know what is on the tip of the tongue of everybody in Thailand, for example, we are working very closely with the government and to give you some confidence that we are sure that there would be an outcome and light at the end of the tunnel over the next few months.

In terms of the overall One Amazon and the other MOUs, which we've already signed, our team has been working day in and day out, and we're making sure that each of the platform builds the digital backbone and make sure that we are sitting on top of their infrastructure play. So again, all these are not included in the guidance for 2026.

Great. My last question, that was helpful. You highlighted, Jay, accurately that you invest to grow. You made a comment about that, and you've done that. But given the solid awards, the growing pipeline, are there any key investments you need to make now in terms of personnel, staff, facilities to take advantage of the opportunities in front of you? Anything meaningful that you can talk about or can quantify?

Absolutely. I think I touched upon this, Brian. This is very, very, very important because I think most people think that, no, we're a small company, we don't have the means to do what we do. So what we are doing right now, and just give it to you straight, right?

These are all numbers back. So we are focused heavily on our M&A story as well because that brings in deep execution legs for us. But at the same time, we're also looking at how we expand ourselves into some of the fastest-growing economies in the world. So first, India. if you look at the India AI market today, and I mean, I may be slightly off on these numbers, but we're looking at about $9.5 billion today, and that's expected by 2032, I think, or '23, it's going to be about $130 billion.

There's a tenfold expansion of the AI market. The country is also -- I was there recently, the country is also doubling its data center capacity from 950 megawatts to roughly around 1,800, 2,000 megawatts. By 2026, we're talking about a transformational change. So this is a massive national shift when it comes to AI compute cloud and digital sovereignty. So our investment into India is not cosmetic.

Our acquisition potentially is also not very cosmetic. It positions us in a triple-digit billion dollar economy and where we are building our own local team, our own regulatory posture, but more importantly, we are looking at sovereign grade projects at scale today.

So India is one big market for us going forward. The second market, which we talked about and which is also going to give us scale and people to help deploy in the local market is the United States. Now the U.S., as everybody knows, the largest AI market on the planet, represents roughly around 36% to 38% of the global AI spend today. But that said, it is also true that public safety, digital infrastructure, your GPU demand, defense and so on and so forth are all running into tens of billions of dollars apart from the data center market and the AI market.

So for me, the acquisition there we're pursuing is very deliberate. It gives us established platform. It gives us huge customer potential. And more importantly, it gives us execution depth. And that's something you asked me to talk about as well to deliver, can I deliver real AI infrastructure and public safety programs in a country like the United States or India? This is how we're going to do it.

So the U.S. for us becomes what we call a second engine for Gorilla for the next 2 to 3 years, not just a size project. So look at it this way. We're not buying revenue, we're buying capability. So that gives us scale. So India gives us scale in the hypergrowth market. U.S. gives us credibility in the world's most mature AI and law enforcement ecosystem.

Our last question comes from [ Bart Boone ] from Red Chip.

Jay, Bruce, congratulations on a great quarter.

Thank you.

I just have a few questions here. First, we know you design, build and operate AI data centers, provide GPU as a service and you're rolling out your own branded AI GPU platforms with partners like EdgeCore and Intel.

At the same time, you're deepening your relationship with NVIDIA and the wider GPU ecosystem. So how should investors think about the unified flywheel you're building and Gorilla's strategic role inside the next wave of AI compute infrastructure?

That's a very interesting question. Well, I'll keep it short. The short answer to that is that we're not playing in one corner of the AI infrastructure. And I think the market needs to understand that. Why? Because we're building the whole engine.

The data centers are just an anchor, [ Bart ]. We design them, we build them, we run them. We sit on them because they're long-term hosting and power and capacity contracts and so on and so forth. On top of that, we stack the GPU as a service using our NVIDIA-based platforms with our partners.

That gives us usage-based recurring revenue as the workload scale. And this is a very important term, which the market needs to understand. As we scale, we will scale as well. And as our customers scale, our revenues will scale automatically. That term is called usage-based recurring revenue as the workload scale.

Now on top of that, we talked about the flywheel. The flywheel is very simple. Data centers drive GPU demand. your GPU demand pull through our software, the software then locks in longer and deeper national engagement. Think of it as a 3-pronged approach. So how should someone see us, whether it's investors or customers, they should see us as a sovereign grade AI operator, not just as a project contributor or a box shifter. We're surely not a box shifter.

Thank you, Jerry. I think that adds a lot of color there. Now shifting away from the data center conversation. You've spoken about Quantum-safe networks and the Intelligent Network Director platform for lawful interception and network intelligence.

How should we think about these as commercial gateways into larger sovereign infrastructure and national security programs rather than stand-alone products, right? How do they all work together?

The quantum question. I love that. [ Bart ], let me keep this tight. I know we're running short on time. This is one of the most misunderstood parts of our business.

First of all, the market is enormous, right? Post-quantum cryptography alone is expected to cross over $100 billion to $150 billion globally over the next decade as governments upgrade everything from national networks to their financial systems to their defense communications and so on and so forth. Now look at this, every country will need this not want, but they will need it. That's an absolute must.

Our Intelligent Network Director is never just a product. What we do is when a country lets you monitor its entire network flows, your lawful interception, your cyber posture, they're not just trialing a tool. They're effectively handing you the keys of their national nervous system. And this is what the market has misunderstood. We're not trying to sell a product. We're actually managing their national nervous system.

Now that becomes a gateway into data centers, into sovereign cloud, into your public safety modernization, your AI workloads and your full national security stack and so on and so forth. Now as we move forward, right, the quantum-safe network opens the door even wider for us. Why? If you look at the way we protect country's backbone communications, we're automatically in the room. I mean, whether it's Taiwan, whether it's Thailand, whether it's Egypt, whether it's LatAm, it doesn't matter where it is. We are in that room for the next phases of their data centers, their GPU infrastructure, all of the national analytics, all of their secure workloads and all of their critical infrastructure protection.

We signed 2 projects, as you know. And these were 5G lawful interception protecting national critical infrastructure. Now these technologies are the starting point for the programs that run into hundreds of millions of dollars over their lifetime. So what is Gorilla doing? We're sitting in that room. We're negotiating. We may sign tens of millions of dollars today, but my aim is to convert them to hundreds of millions of dollars over their lifetime. So think of it this way, whether it's your Intelligent Network Director or your Quantum-safe, we're not stand-alone. Think of them as a handshake that goes together over larger sovereign scale national infrastructure program. That's how I look at it from our IND perspective.

That's very helpful. I just have one more question to leave you with. So over the past few years, you've gone from survival mode to a position where you have record revenue, strong profitability, a multiyear AI data center mandate and a multibillion-dollar pipeline. What do you think the market is missing about Gorilla's trajectory when you look at the next 2, 3 years?

You put me on the spot there, about it. Okay. So first of all, I want everybody to understand this. We're no longer a project shop. we are becoming the sovereign AI infrastructure operator, right?

Our Phase 1, for example, just in Southeast Asia, we're talking hundreds of billions of revenue per year. Later phases are just larger in scope. And the duration and none of that is in the guidance as yet. Again, I want to repeat that, it's not in the guidance.

Second, our pipeline is growing. We're now sitting on our pipeline about what, $7 billion across telcos, law enforcement, infrastructure and government. These are multiyear national platforms.

Now once we have proven that we can deliver, you're rarely a one contract supplier and the market knows that. Now if you look at the third part of it, balance sheet. And I think there's been quite a few questions on that. We have more than, like I said, $119-plus million of unrestricted cash -- sorry, $107 million of unrestricted cash and total of about $120 million of total cash left on the books.

Now that means we can go fund serious data center builds without even blinking. A year ago, and you said it very rightfully, so we were managing survival. Today, we're designing national architectures. We're also making very clear, we're trying to make sure that we do not dilute our shareholders as a default. We're exploring a very range -- wide range of creative structures with our partners from project-level vehicles to revenue sharing and other funky options that let us scale hard without handing away the company to them.

Now I did talk about my ambition. And again, this is my personal ambition, and this is not in guidance. This is not target. But I would like to see that the way things are moving forward and all the partnerships in front of us, I would like to be operating at about $500 million of revenue -- annual revenue by 2027 and increasing from there going forward as well.

And finally, I think Brian talked about the flywheel question previously and so did you, [ Bart ]. Every data center for us brings in long-term GPU and hosting revenue. On top of that, as we evolve, the more infrastructure we operate, the more software intelligence we can pull through.

What is the market missing? I think that was your question. The market is missing the fact that Gorilla is shifting from a small cap story of survival into a multi-region sovereign AI operator with long duration of contracts, expanding margins and a very serious revenue ambition. Most people are looking at it as the Gorilla yesterday. That yesterday was in [ Weber ] at $22 million of revenue.

Trust me, when I hit $27 million, if my personal ambitions fulfilled are fulfilled and we hit $500 million, that's an exponential growth, which not many people have seen before. So the gorilla that they will meet in the next year will be a very different animal [ Bart ], and that's what the market is missing.

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

Thank you very much. Thank you, everybody, for taking your time and listening to us. To our institutional and retail investors, I'm going to say this out loud, and I haven't written this or practiced the speech before. Your conviction has carried us from survival to scale. Now people ask me about survival. This is very important. You stood with me, Bruce and the rest of the team through every single battle we have bought to get you.

Now we enter a new phase. We're not just winning contracts. We're building the AI infrastructure of nation. Your belief has shaped this company, and it will definitely define everything we've been building in the years ahead. Most importantly, I want to thank every single one of you, naming people like Sam, people like Christian, people like Gunther, who actually stood by me while the world was still playing catch-up. And I intend to repay the trust with performance.

So thank you. And thanks, everybody, for listening in. Have a lovely day.

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

Welcome, everyone, to this extended in-depth fireside chat with Gorilla Technologies. I'm your host, John Roy. I cover technology companies in Water Tower Research. Today, I'm joined by Jay Chandan, he's the CEO of Gorilla and by Board member, Thomas Sennhauser.

I should mention that the company's safe harbor statements can be found on their website. Also, this fireside chat may not be reproduced or a written transcript distributed without the expressed written consent of Water Tower Research.

Well, welcome. Well, let's jump right into it. Let's go right into the questions. So as an introduction, maybe you could give us an overview of the company and your markets.

Absolutely, John. First for all, thanks for having me. Gorilla is a London-headquartered AI infrastructure and intelligence operator. Now we're not a software vendor or a hardware retailer like most allude to. We're a full stack builder and operator of sovereign AI infrastructure. What does that mean? It means that we design, we build and fund and operate all these AI data centers and help monetize them so that we can provide national intelligence security platforms on a long-term basis anchored by multiyear service agreements.

Now what do we offer? I mean there are four markets we serve today. Security and network intelligence. So things like sovereign surveillance, lawful interception, threat analytics, compliance platforms, which been -- all of the -- or underpin the national security, cybersecurity requirements and public safety.

The second one is smart city platforms. AI-driven monitoring traffic, environmental and safety platforms for both urban and national deployments.

The third one is GPU as a Service. These are high-density GPU infrastructure for governments, enterprise and more importantly, research clients for delivering orchestration software, service levels, which they obviously would require a guaranteed availability. And then finally, operations and managed services. So think of it this way. Once we've secured the customers' contracts, we have long-term SLAs where we own, operate the infrastructure on behalf of the customers. That means we have to ensure uptime. We have to ensure security. We have to ensure compliance and final scalability.

What does that mean? It means that the different markets. So there's been a lot of questions about, "Oh, what markets are you serving?" So for me, the market segments will be divided again, primly into 4 different segments. Government and public agencies. Today, more than 80% of our revenue is actually government and public agencies. So think about it this way, smart policing, tourism, smart city deployment, intelligence, national security.

The second one is telecoms, telecom operators and utilities. So think about it this way, national backbones, AI-ready infrastructure that supports 5G. We just recently won a number of 5G projects as well, energy management and digital services. The third one is enterprises and financial institutions. So anybody who's looking for secure AI workloads, fraud detection, network intelligence, compliance and so on. And finally, we do a lot of work in education and research, so national scale digital infrastructure, for example, smart education platforms, GPU access for universities and innovation centers. So those are the 4 primary segments we cover. I hope that answers your question.

No, that's great. I mean you were talking about operations and then data centers. Maybe you can give us a little more color on this very large, what, $1.4 billion contract you did with Singapore. And I know you're building a few data centers for them, I think.

Yes. We are actually going to be building four across three different geographies, which is Indonesia, Malaysia and Thailand. When we signed the contract with Freyr, who's an NCP partner, by the way. We decided that we were going to build it in phases. We didn't want to take the big bang approach of going and deploying all $1.4 billion across three different countries. It just doesn't make sense.

So what we did was we're taking the first phase of $300 million in Indonesia, starting Q4 with optional extensions. So these are 3-year contracts with obsolete extension. What are we doing? We're providing AI-native infrastructure, which means we're providing GPU-dense racks, optimized with NVIDIA H200plus hardware, liquid cool for sustained training workloads. Then we are providing low PUE workloads, basically below 1.25 typical for tropical environments, and this is very essential for the customer. We are providing sovereign-ready orchestration, which means for workload scheduling, compliance, tenant level SLAs, we manage all of that.

And finally, we're also providing them with edge integration, so linking national sites to very low latency workloads. We will have kicked off all the services by first quarter of 2026. But look at it this way, John, the market demand is far more significant. You said this was large, but we are actually going after even larger projects today. The market is there. There's a demand of more than $12 billion to $15 billion plus today. And our alliance with Freyr is already pursuing more than $2.5 billion of opportunities within the Southeast Asia region alone. And what makes it very different is that we're not just building these facilities. We are owning, operating and monetizing them through multiyear SLAs. So think about it this way, what makes us more than just a contractor.

So Thomas, can you give us a little more color on that?

Absolutely. We are just in the final statement of work, a little bit about details about the networking, all the [ small PBT stuff ] we are doing and also negotiating with our partners, the pricing so that we have an optimized price, which is fitting our calculation plus also our partner. And very soon, we will have that on the road with the first chunk, which is about $300 million. And we're already discussing the next phases with the end customer, and there is much more to come. So just stay tuned.

So what about ONE AMAZON, I mean I know there was a lot of noise about that a little while ago. Tell us more, what's going on?

We've just gone through this whole last week with -- at the Climate Week. And what was exciting for us was we were able to showcase our entire profile through a launch stage activities during the September Climate Week. It was not just an ESG branding, what we are doing is that we took our flagship environmental intelligence platform and showed the world that we were actually now turning the Amazon's biome into structured investable data.

Until now, it was all about, building proof of concepts, you're signing the deals with Mato Grosso, for example, getting 1 million hectare commitments from them, getting the likes of IDB to work with you. This is a long process. We're talking about a 30-year project. So it took us a long time before we could actually get this. Now we have started to look at how we deploy our Gorilla AI stack to capture all of the biodiversity. So whether it's all the biodiversity that exists within the Amazon rainforest, the water, the soil, the climate signals across millions of hectares. So we're going to start with the first 1 million hectares and go across the board. The raw biome data, which we generate is then processed in our natural infrastructure which is basically to create the world's largest natural compound database.

Now we're working with the likes of [ Okura ], for example, based out of Singapore, where we're using our AI engines to analyze all of the biome compounds, the Amazonian Biome compounds for application in medical, medicines and wellness. Now the model is a dual model. From infrastructure side, we're building the data capture layer. We're having the sensor. So we're working -- we've got the sensors being deployed on the ground level. We've got the satellites mapping the topology. We've got the edge compute. And then what we're doing is it's flowing back to all of the Gorilla data centers, which we will be building within the regions.

So we're building 9 data centers across each of the Amazonian countries, and we'll be building one in the United States, which will host all of the satellite data. So that's your -- that's the first model. The second one is the intelligence model. So we're converting the natural capital into tradable usable outputs. So basically, we're taking compound libraries for the biotech. We're taking environmental credit streams for finance, real-time monitoring of the government and making them tradable. That's a very unique thing which no one has ever done before. And this matters for us, and it matters for ONE AMAZON. Why? Because it shows Gorilla's ability to take something such so vast and so complex as a rainforest and turn it into a sovereign digital asset with real economic scientific value, and we're doing that in a region in Latin America. That's the most unique thing about it today.

So Thomas, ONE AMAZON is huge. Can you give us some more details?

Yes. I just came back from Climate Week in New York last week, and we had the Chairman of the Environment Task Force from the White House, Ed Russo, who did the opening. We had a big announcement on SEC, the Security of Exchange Commission who approved the digital token for ONE AMAZON. There was an MOU signed with the IDB, the Inter-American Bank. And we did a demo of our sensor with a first POC we did for a few first hectares. So things is in progress. But again, it's a huge project. It will take time. And we're looking forward to COP30, where we will have a little bit more demonstration and the first data, which we hopefully can then public share with a bigger audience.

Interesting. So let's dig a little deeper. So let's talk about your vision and strategy. I mean, obviously, there's a lot going on. Do you -- how do you define and measure your success for Gorilla over the next 12 to 24 months?

Okay. That's a good question. We -- I mean, we've told this before, and I think we want -- I want to reiterate this to the market again. We measure success in hard contracted terms, okay? There's no fluff, there's no fake contract. This is real. We've already covered over $1.4 billion, plus we won tens of millions of dollars in Southeast Asia on the 5G contracts as well. We are on track to close another further $1 billion by June 2026, which I promised. So this was completely -- which came -- which we obviously didn't disclose to the market at that point of time until we sign the deals. But now the pipeline is even bigger than before. We've got now another $5-plus billion of pipeline, apart from the $1.4 billion we've already covered and the $1 billion we've signed, and we hope that we will sign, sorry, my apologies. Now what are the metrics we measure ourselves?

First of all, contracted backlog. I'm very proud to say that we have multiyear SLAs locked in, in converting our pipeline into signed agreements. Today, I can announce that we have over $85 million already locked in for 2026. By the way, this does not include the data center project of $1.4 billion, which has already been contracted. No, it does not.

The second, we pride ourselves on execution speed. We go from the time we select to do our site selection to our first review, we are going in less than 90 days. That's kind of unheard of as well. The third one is cash discipline. Cash conversion cycle is important. Accelerated collections is important. Debt reduction. We've gone from, as you know, $21 million of debt in the beginning of the year. Now we're under $16 million. So we're very fortunate and we're very blessed to have done. Our CFO has done a phenomenal job. But more importantly, what the market also doesn't understand or realize is that we have $27 million of real estate assets, which is actually earmarked against the debt. So when I clear off the debt completely, I will still have additional capital reserves that will be adding to my kit.

And finally, operational readiness. We need to make sure that we're able to scale delivery teams. So what we have done is that we have hired a massive team in India. As you can see, we're hiring more than 150, 200 people as we speak. We will have about 70 people in Thailand by the end of next month by the time we close our acquisitions. We will have about 150-plus people in Taiwan. We have more than 30 to 40 people in Egypt. And we're also accelerating some of our U.S. acquisition as well. So it's not just about announcing contracts, we're making sure that we are revenue generating and building on our infrastructure as well.

Yes. There was a lot of projects you were mentioning there. Are you getting any kind of reuse from one project to the next, are there feeding to each other? Are there cross-selling opportunities?

Yes, there are cross-selling opportunities today. But what we are trying to do is that we are making sure that we're able to make our partnerships and our ecosystem much more stronger. Now when I work with -- so for example, if I'm working with government sectors, I'm making sure that I'm able to work on a particular project. So for example, the 5G LI. Now that is a very, very important project for us. What we have done is that we have taken that particular project. We built on the customers done 4 years ago, successfully deployed it. The customer gave a raining review. We took that and implemented again for the same customer. So now we expanded our capabilities.

Now we've gone and sold in other regions in the Southeast Asian market, as you've seen in the press announcement recently. We've got 2 new projects. And we're actively engaged in 2 more discussions in the Middle East who come to us and said, we don't know of anybody who's done that. Can you please help us? So for us, this is not just building a product and selling it and deploying it once, we make it repeatable, and that's the mantra of Gorilla today.

Great. Let's talk a little bit about your financials and capital essentially. Can you break down your capital needs and your burn rate and funding needs over the next 12, 18 months?

Absolutely. First of all, we have raised $105 million recently. We haven't spent any of that. So we only reduced debt further. We haven't used that money either. And our customers are paying. And this is an important fact, Roy. We have our customers paying us regularly now. Last quarter, they paid us. This quarter, they paid us. They're going to pay us again in a couple of weeks. So we are delivering and our customers are paying. That's one.

Second, we have closed $1.4 billion of contracts, and we're targeting another, like I said, $1 billion plus by mid of 2026. The backlog itself generates payments, first of all. Secondly, we're not going to be dilutive. And I want to make this message very clear because we want to preserve shareholder value. So what we are doing is we're exploring very creative alternative sources of funding. So for example, we are already engaged in very active discussions on project level debt. We're doing vendor financing. We're working on export credit. We're working with sovereign funds. We're working with green infrastructure capital, and we're working on other partnerships where we can -- we believe that dilution is the last lever, not the first for us, okay?

And then finally, what we will also do is we will also use our scale. We were developing more into the U.S., and I'll talk a little more about it as we go through this discussion. The CNS and CANS integration is helping us access local credits now. Now we are also able to tap into targeted pools of capital with our broad equity issuers as well. So think of it this way, we're prudent and capital efficient. Our burn is tightly managed and our project phased. We do not need heavy corporate level cash because our model funds the project at the SPV level and ties CapEx to contracted utilization. This keeps us very lean on our working capital and avoid speculative build. And that's why someone quoted sometime back, "we have an office or a research parlor or enhance a lot," doesn't really matter because it's London, and we've got a very, very, very lean, efficient business to run.

So looking a little shorter term, over the next 6 to 12 months, what kind of milestones should investors be looking for or watching out for?

That's a good one. Now for the last -- I mean, we have been focused on actively building our pipeline, but reducing debt at the same time, right? So -- but that does not mean we have missed the ball on how we expand. Now the next 6 to 12 months, the first focus would be our Southeast Asia Phase 1 mobilization. We've signed this large contract. We're not going to lose our eyeballs on that, and we're going to make sure we are focused. So what would the investors watch? They would be looking for anything, NTP being issued, the procurement loss being awarded in Q4 of 2025, the first racks being powered in the GPUs land. So that's our first thing.

Our second would be we are very actively pursuing an acquisition, a potential acquisition in the United States. That will give us an integration of over 200 people to establish scale in an American footprint. So we believe that, that would come to some sort of a conclusion, not closing, but that would take a long time, but at least to some sort of a logical conclusion. The third one would be Thailand. We're very actively focused on Thailand. So what would happen is we would have closed our CNS and CANS acquisition, and we would have deepened our delivery capabilities in Thailand and the APAC region.

I've also mandated my team and my Head of Strategy to close and look at a large facility in India. We're currently closing that as we speak. I think we should be live in either October or November. That's for our existing facility. But that said, I've also mandated to look for an acquisition, and we're in conversations with about 3 or 4 businesses, which have about 1,000 to 2,000 people, and we're looking to acquire that as well. So investors should keep an eye out on that. Singapore, we will be opening up our office. That would be more a sales office, having more with an anchored regional AI data center operations.

For MENA, we are actually -- 2 things that we've been looking out for will be the milestones on the Egypt project because now we're going into testing early next year, which means we'll go -- we'll complete a full deployment by the end of next year, which will be a year ahead in terms of completion. But at the same time, we'll also be looking at projects. I just told you about a couple of 5 GLI projects, which we are looking at and talking to in the Middle East. Hopefully, that comes to some sort of a logical conclusion over the next 6 to 12 months. LatAm, this is important. The one I said has actually opened up a lot of doors for us in the LatAm region, whether it's Panama, Mexico, Guyana, Brazil, Peru, Chile and so on. We've got some very large projects coming out of Brazil, which we will be slowly or quickly announcing over the next 6 months, 6 to 12 again.

And then finally, the revenue ramp. Now I talked to you about the $85 million backlog, but I didn't talk to you about what the ramp-up would be in terms of revenue. What we will do is we will provide guidance during our third quarter results so that we will let the market know exactly what that number looks like for 2026 and 2027. I hope that answers your question.

Definitely. It does seem like you've got a lot of things going on. A lot of balls in the air. You're juggling quite a number of things. Maybe we should talk about risk. So risk and execution risk. So what do you see are your biggest execution risks? And what are you doing to mitigate them?

That's a good one. I think I have about 4 or 5. And we talked about -- interesting you asked me that because we just had a management session recently, and we talked about this and we discussed it at length, and we've put some of them to rest right now. So biggest risk for me would be the GPU supply chain today. Global demand is outstripping availability. That's a big challenge. Long lead times for NVIDIA class GPUs. So that's going to be my first challenge.

I can tell you that's a 4090 that I've got sitting over here.

The second one would be power and readiness, cooling readiness. I'm sure you've seen that the high-density workloads require reliable low PUE infrastructure in very hot climates. And as you see, we are very actively investing in very hot climates today. That's number two. Sometimes there are delays in local permits and regulatory approvals. That becomes a bit of a hurdle. Sometimes there are sovereign compliance issues like strict data localization that requires security requirements, different countries. Like if you look at Southeast Asia, no 2 regulations are aligned. So we have to conform to each of the local regulations.

Sometimes, sometimes, there are civil delays, vendor coordination, integration of IT and so on, geopolitical, and that's a big, big risk. In fact, I should put that first. The geopolitical exposure for us is a bit of a challenge because, for example, what happened in Thailand, right? The Prime Minister got fired. We got a new Prime Minister, lots of projects were put on hold. So people -- I do believe sometimes -- some of our investors just don't have the patience. They just don't understand the political risk we have to go through when you're looking at government projects.

Listen, government projects are great for 2 reasons. Once they contract, they're gonna bed with you for the next 10, 15 years, and they pay regularly. But the biggest challenge is the political exposure, right? That's kind of a big comp. So things like regional instability, political shifts in emerging markets, FX volatility, those are some of the big execution risks, but we're also putting the mitigation strategies already in place, and we're making sure we have a team, by the way, a dedicated team to look after the mitigation of these risks.

So Thomas, any kind of view on execution risk from your position on the Board?

Yes. I think for us on the Board level, I think we have 4 risks we see in it. One is supply, of course, which is always a channel power, people and then we have the regulation region, geopolitic macroeconomics around it. And I think to mitigate all the risk on the supply side, we're working as a company very, very close with partners. We bring them early on board as early as possible. And we really believe in a strong relationship, which helps us also with the ecosystem to get the supply under control.

On the power side, we have normally when we build data center, make sure that we have multiple contracts in place. We are very careful on the location. And again, a partner is a critical part to overcome this risk. On the people side, I think it's for everybody these days, critical to find the right people, the right talent. And what we are doing as a company in Gorilla, we really want to attract the right people, the right talent. And I think we have a unique culture in our company, which makes it easy to work for us, and I think it's really a cool team. So we really emphasize that and making sure we attract the people around that.

Regulation and geopolitical, we work with all the regulators, the different governments as tight as possible to reduce that risk. We have in multiple regions, big projects. So if something happened in one region, it will not impact as big as we're not depending on Asia only or on European market. So that helps us to do that. And also our pipeline is in all the different regions very, very strong. And with that, we mitigation of the risk is much, much lower than maybe other company have.

Let's dig into that a little bit more. I mean you have a lot of public sector clients. Obviously, it's a large percentage of your current business and future. How are you really doing this? Did you add a team? Can you give us a little more color, particularly given the long procurement cycles?

Yes. So the biggest challenge we have is localization and capability transfer. You go into these regions, like, for example, when we went into Egypt, we were completely gobsmacked by the local -- by the requirements on the local side. Forget all the other complexities, HR is one of the biggest challenges. So what do we do? We invest local hiring. We build training and partnerships. So what did we do? We went into the universities in Egypt, hired them fresh off the books and said, now we're going to train you.

We're doing the same thing in Thailand. We have CNS and CANS, for example, which we're acquiring. What we're doing is we're using them to go into the universities and hire locally so that we can build an R&D team. Now the good news is that CNS and CANS actually has about 30-plus people in R&D. That's a good kind of a stepping stone, and we can evolve from that particular stepping stone. Now in India, we are looking at potential acquisition. But in the meanwhile, we're working very closely with the universities to make sure that there is long-term control from the business side of it in terms of HR. The second one would be the regulatory and the compliance engagement.

Now our platforms are built for national data localization and making sure that lawful interception standards are met from the stock. That means we have to go through every single precertification and local council requirements. It's not like I go to the country and I've done it. Every single part, like, for example, working in Brazil, in ONE AMAZON. Mato Grosso is completely different from Sao Paulo, completely different from Rio, right? We have localization and precertification requirements in each of these different places. So we have to make sure that we are aligned to any -- to reduce any late-stage regulatory risk. Then you have the geopolitical risk we just talked about it. So what we do is we do country-level SPVs so that we can have diversified vendor sourcing projects, which reassures the governments and that Gorilla can deliver even if the market shifts.

So for example, when we're delivering GPUs, we make sure that it comes into the country, let's say, for example, in Southeast Asia, in the country in an SPV so that the delivery stays there and that Gorilla owns those GPUs on their books. And I think these are maybe the 2 or 3 key alignments or interest we would like to align with public sector clients today.

So Thomas, from your experience, how is the best way to mitigate these long cycles that Jay is talking about in procurement?

Yes. I think it's -- as Jay said, it's long and it's challenging. But what we are doing is we're really working very local. So we have local people on the ground because we believe business is done locally and not on a regional or on a worldwide level. So that's why we have offices and engage with the local people that helps us to drive the decision faster than as a global company.

Got it. So you've talked a little bit about GPUs and other data centers and things. I'm curious as to the competitive positioning. I mean, there are a lot of AI data centers out there in the world. How are your different than traditional? How are you protecting your IP and your technology road map from the competitors?

That's an interesting question. Why? Because, again, the market just does not seem to get what we sometimes communicate. And I think I want to be -- maybe spend a little bit of time and be very clear as to how we differentiate ourselves, what is our technology stack and how defensible is our IP, right? So the proprietary AI orchestration intelligence stack, which Gorilla has built, our platform integrates with all of the GPU scheduling, the multi-tenant security requirements, the telemetry and billing at a sovereign level. Now this allows governments and critical operators to run secured AI workloads in a way off-the-shelf data center software cannot match today. So that's kind of our first IP.

The second is the domain-specific know-how and certification. We have been in lawful interception for decades now. We've been in business for 25 years out of 20 years we spent in lawful interception. We understand smart policing and national security deployment like nobody else, at least within the region today. So what does that mean? It means we have deep compliance. We have deep regulatory approvals, and we have kind of almost firewalled any new entrants who cannot fast track in this space. This requires a lot of trust from the customer. That's one side, but it also requires very deep compliance. So these go hand in hand, and it's very difficult for new entrants to come in, impossible, in fact, for new entrants to come in. The third one, which I'm very, very passionate about is our Platform as a Service, right? The end-to-end vertical integration, we own the entire stack today, whether it's video analytics, whether it's infrastructure, whether it's IoT and whether it's cybersecurity. Each of them reinforces the other.

So for example, the video intelligence feeds on smart city workloads, which require our data centers to operate and securitize the backbone. Now the network in this case, the effect looks and locks actually. It looks and locks in the client and makes displacement very hard. Now if you look at our average tenure with our customer today, it's over 14 years, okay? So that's what I said. The network effect of this locks, looks and locks in the clients at any -- and makes it very difficult for us to be replaced or displaced today.

And then finally, the sovereign relationships and all the embedded SLAs we have built with the customer. See, once the systems are replaced, it is very difficult to contractually get them out of system unless they want -- we've screwed up on a big proportion. Thank God to date, we haven't done that. That's one. Now as we have tried contractually with the customer, we have to deploy and deliver critical KPIs for the customers pertaining to the local loss. That creates a lot of long-term stickiness and it also prevents -- has very high switching values. So these are the 4 or 5 things we have today, which makes us very defensible.

Excellent. So moving a little bit, let's say, adjacent. If you start thinking about your partnerships and you're building an ecosystem, you've got partners with HPE and NVIDIA and AECOM. I mean, how are those really helping accelerate execution at this point?

Listen, we thrive because of our partners. We have partnerships with HPE, NVIDIA, AECOM, Dell, Edgecore, Supermicro and so on and so forth. Now our HPE partnership, it strengthens the credibility with the top of list. It helps accelerate our product deployment. The one with NVIDIA, for example, the alignment underpins the GPU supply and optimization. Now regional partners such as Freyr, for example, which we signed with recently, helps us compress the time to market and localize the delivery and operations.

Now I'm sure you've seen already, John, NVIDIA actually helped us work -- actually build and deploy an AI model, which has never been tried and tested before. They help the Sápara Community doing the ONE AMAZON, create the large language model, which translates and near extinct language on the planet. There are only 2 people who speak the language. One is 99 years old. The other person is, I think, about 60, okay? We managed to get the person to speak for about, I think, about 16 to 18 minutes, and we're able to map it and translate it into English. So what have we done along with the media, we've been able to now preserve a language that would have been extent. There were 3 people who spoke this language 4 months ago, God bless their soul, the chieftain's mother passed away. And there was a Chieftain who actually came and said, how do I preserve my culture, my language, my identity. And if you see some of the photos recently, I was with the Sápara community in -- at the Climate Week, we had invited them, and I was truly humbled. That's what partnerships bring, right? That's one.

Second, I see these partnerships as backwards, whether it's national operators with utility companies, we work very closely with utility companies. We make sure that we work with engineering firms. We work where we have to partner with civil firms, for example, for bringing water and local licenses and so on and so forth. We don't do the work, but we have relationships and we have to work with them. So those are our JV or consortium partners. And finally, I think the customer validation side of it is very important for us. And we make sure that these partnerships will help enhance some of the customer validation, for example, for us.

So Thomas, with your little bit broader reach and experience, how are partnerships and ecosystems with these giant companies really helping Gorilla?

Yes. I think leverage partner is super critical for us. And I think it's also important to bring them early on board. So we are really leaving partnership not only on paper, we really engage with them very, very early in every opportunity we have to make sure they are part of the process and they feel comfortable to work with us in a different opportunity. So it's a critical path to win and making sure also that we grow with them together. So it's a win-win situation for both. And I think that's really very, very critical also for our growth to make sure that we are scaled as fast as we want. So I just want to emphasize partner and ecosystem are super critical and is part of our DNA to work with them in a real day-to-day business.

So speaking of partnerships. Where are you looking for opportunities for more joint ventures and consortium. Do you see any kind of things on that horizon, places to look for?

Yes. We are currently very well engaged in Southeast Asia, as you can imagine, rolling from our Indonesia into Malaysia into Thailand. So that's one. Closing CANS and CNS in Thailand will be amazing. United States, I just announced that we are actively pursuing a deal to acquire a company. John, this is fresh off. But that helps us position into large government contracts in the United States. Now why? Because when we have a company which provides managed services and take a product company such as ours, you put them together, it's a match made in heaven. We can provide state-level AI infrastructure or we can provide education-focused GPU services does not matter what that is or smart policing or even our lawful interception programs.

Our India, for example, we are going to be focused on our acquisition in India. That would be, like I said, about 1,000 to 2,000 people. That would be our capability center to anchor all of our edge AI, cybersecurity and smart education workloads. So we are going to use that more predominantly as a customer success and an R&D center. So that will be our strategic regions or focus, and that will be our key sectors where we're going to be putting our money to work.

So Thomas, on your radar, what are you looking to -- or in what direction do you think Gorilla should really go into?

Yes. I think today, our presence with the offices we have in the U.S., in Europe, in Asia, we have very well covered the different regions. And we also have projects in South America, Middle East. I mean we have also an office in Egypt, which is Middle East, Africa, depending how you look on it. And I think we are very focused with customers. So I don't think we have very specifics we want to go for. I think we really want to grow with the customer we have, making sure we deliver what we are committed. And then I think we have more than enough in our pipeline to achieve our forecast over the next couple of years.

Now one of the things that investors often do is look at customers for validation of business, the pricing, the delivery, et cetera. Can you share some concrete examples of a client that's used the Gorilla platform and maybe the impact?

Absolutely. Actually, I think I can give you a really good example of what I was reading today from one of the messages sent to me today. The 5G lawful interception platform. Now a lot of people don't understand what we are actually building and doing there. Now in APAC, Gorilla built and operates the first fully sovereign 5G LI backbone, which meets the strictest security and compliance standards while sustaining a 99.99% availability for critical law enforcement and intelligence agencies. And this is important because for them, this is literally their backbone. Now what was -- what came out of that was the outcome and efficiency, it helped the agencies reduce time to insight from days previously to minutes and cut the local cost of ownership by double digits versus in-house bills.

So previously, they added in-house bills, and it actually literally cut their total cost of ownership. So they were so very happy that they asked us to deploy the next phase of that as well, so which we got an extension from a 3, now we've gone to another 3-year contract. But what they've also done is that we have gained real-time compliance reporting for the customer, which they didn't have before. They were like, "Oh my God, can we get real-time reporting" because sometimes you can imagine, right, things go wrong, they need the reporting so that they can put it in front and say, look, we were compliant.

And then finally, we also help them build new AI analytical workloads on a regular basis. We are the only team that sits inside the premise of the customer. That means we are sitting in between 3 of the top telecom -- there are only 3 telecom agencies in Taiwan. We sit in between all of them. And what we do is we future-proof all of the new AI workloads that the customers asked us to build as well. Now that is a great example as to how we can take a product, successfully deployed into one customer and then roll it out to 2 other new customers across the region. Now we've got suddenly 3 new customers for a product we only built 3 years ago, and we have received tens of millions of dollars in revenue. Actually, it will be quite a lot more than that. And by the time we close this, let's say, by end of 2026, we would cross the north of $120 million, $130 million of revenue just on this particular investment of ours. That, I think, is a big success for us.

So kind of following on with that, if you look at your outlook for growth beyond Singapore and ONE AMAZON and certainly what you've talked about, what other strategic regions or sectors are really on your radar?

So today, as I mentioned, the U.S. is a very key market for us. We are actively engaged in quite a number of discussions through our partners, BroadSat, AECOM and so on and so forth in the United States. So the U.S. will be the one key market we will be actively entering over the next 6 to 12 months. That would be both through an acquisition and potentially through an investment we will make as well. That is number one.

We are going to heavily invest into the Asia region. We're seeing a lot of potential growth coming into this. So for example, we talked about policing -- smart policing projects here. We talked about utilities and electricity projects here as well. And what we are doing is we are going to use our capability, which is the newly built capability within the regions and expand across the other regions. So for example, in Thailand -- from Thailand, we can expand very quickly into Vietnam, Cambodia, and Laos. We get from Malaysia, we already got our expansion into Indonesia, but we will slowly be targeting Philippines and so on and so forth as well.

And then finally, we'll be looking to expanding our horizons within the Taiwanese sector as well, where we're going to go from governments to enterprises. And as you know, we just signed a joint venture with a very well-known telecoms operator in Taiwan. That relationship is going to really kick off.

Excellent. So there's one area I wanted to talk about a little bit, which is sustainability and ESG. How does that fit into your growth strategy?

To be honest with you, this is something we have been very passionate about, but we did find a very large project to kind of hone in our capabilities. But ONE AMAZON brought that for us. For me, ONE AMAZON is not branding, okay? It converts -- as I said, it converts rainforest biome data into investable outputs such as lateral compound databases for health, environmental credits for finance and so on and so forth. But ONE AMAZON will be the largest sustainability project ever done, period.

If you listen to Rodrigo Veloso speak at the Climate Week last week, he said that they were looking to raise over $1 trillion for this particular initiative. And they believe that, that is a possibility. And I've known Rodrigo for some time. When he puts his head to it, he will make it happen. So he's an absolute phenomenal human being.

The second for us is moving our AI data centers into green AI data centers. Now designs with PUE below 1.25, renewable integration and ESG monitoring as part of the SLA, we make sure that we're ensuring every workload is measured for impact. And that's something we are very, very, very passionate, and we're investing quite a bit on that.

And then finally, if you look at our sustainability and ESG data monetization, for example, we have got a steer tourist safety project in Thailand. We're working with the Thai tourist police and the Royal Thai police. So our data monetization is focused on the ESG, and we want to replicate that in LatAm to run our infrastructure, showing how sustainability can actually deliver and not only just be an add-on, right? It's more like a core part of your function going forward. And that's what excites us today.

Well, that's great. Well, I think we're going to have to leave it there. We're running at the end of our time here. Jay, Thomas, I really appreciate you spending the time with me today at our fireside chat.

So to learn more about Gorilla, please visit their website or you can look at our research on www.watertowerresearch.com, I want to thank everyone for joining us.

Thank you very much, John.

The views expressed in this fireside chat may not be necessarily reflect the views of Water Tower Research LLC and are provided for informational purposes only. This fireside chat may not be distributed or reproduced without the written consent of Water Tower Research. It should not be considered research norm recommendation. WTR is an investor engagement firm, not a licensed broker, broker-dealer, market maker, investment bank, underwriter or investment adviser. Additional disclaimers can be found on watertowerresearch.com.

Thank you for standing by. This is the conference operator. Welcome to the Gorilla Technology Group, Inc. Earnings Call for the First Half of 2025. Gorilla Technology Group is listed on NASDAQ under the ticker GRRR. [Operator Instructions] The conference is being recorded. [Operator Instructions] Before we begin, we will read the forward-looking statements.

Today's call includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and projections about future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially. Forward-looking statements often include terms such as expects, believes, plans, anticipates, may, should and similar expressions.

For a discussion of important factors that could affect Gorilla's results, please refer to our filings with the SEC, including our report on Form 20-F. Except as required by law, Gorilla undertakes no obligation to update or revise any forward-looking statements made on this call, whether as a result of new information, future events or otherwise. I would now like to turn the conference over to Jay Chandan, Chairman and Chief Executive Officer; and Bruce Bower, Chief Financial Officer. Please go ahead.

Thank you very much. For everyone who's dialed in, thank you very much for your support and attention. Gorilla Technology has entered the second half of 2025 with more momentum and firepower and more market reach than any other time in our history. Our first half delivered about $39.3 million in revenue, which is a 90-plus percent year-on-year increase. But at the same time, we did so by executing on very large complex projects in multiple geographies. This proves that our AI-driven security, intelligence infrastructure solutions are in demand at the highest scale and that we can deliver them consistently at scale. Now financially, we have also strengthened our position on every front. We have a rock-solid CFO, who's reduced debt to $18.1 million, improved our liquidity with about $26.1 million of cash and then further added another $105 million to our kit in July through an equity raise to accelerate growth.

Now these are just not numbers on the page. These are what we call -- this is fuel for securing and delivering long-term high-value projects, which will define the future of Gorilla. Operationally, we've also signed 3 new projects over the last 30 days. I promised I was going to be announcing a lot more coming in the coming days in my previous call, and we will be making very many announcements shortly as well. Two projects were in Taiwan, one in the U.K. The one in the U.K. was a significant extension of the existing U.K. customer we have, but the 2 new projects in Taiwan were new customers. These were strategic footholds for us, not one-off wins alone. What it also does is it helps us strengthen our long-term recurring revenue base with new customers so that we can increase and expand further into these markets.

Now profitability remains a core discipline for Gorilla. On a normalized basis, adjusted EBITDA and adjusted net income both came at about $5.7 million, demonstrating we're not just chasing top line growth. Now we are building a profitable, sustainable business. Our model now is structurally much stronger compared to where we were last year at same time, shifting from a very seasonal milestone heavy cycle to multiyear contracts that will deliver steady revenue alongside what we call milestone upsides going forward.

We are no longer just a business of supplying technology. We are delivering national scale AI cybersecurity, data intelligence platforms that change how governments and enterprises operate. But more importantly, with the platform partnerships and global delivery capabilities we have now in place or which we have created and put in place, Gorilla is built to scale, and we're built to win and we're built to lead. I will pass it over to Bruce. Bruce?

Thank you, Jay, for the kind words, and thank you also for the overview. Jay gave you the headline financial numbers. What I wanted to do is to dive into a few items and really highlight certain things. So the first is, as Jay mentioned, the first half revenue surged to $39.3 million. That is obviously a great start, up 90% year-over-year. One of the things you might notice is that the gross margin is in the low 30s. This is skewed lower compared to last year because of the mix. Last year was just essentially service revenue, which was -- is higher margin. Nonetheless, we still maintain our full year forecast for gross margins in the 40% range, and that's given basically the mix that we see in the second half of the year.

A couple of other things is you noticed that there are 2 one-off adjustments or losses that show up, and I wanted to explain those. So the first is a financing-related loss. This is primarily due to the exercise of warrants by warrant holders in the first half of the year. This is basically a pure accounting item. There's no cash impact, and that's essentially the loss or the difference between the exercise price of the warrants, which was $5.60 a share and the prevailing market price, which was higher. So we just -- we have to book that for accounting purposes as a loss. So there's no cash impact. There's no impact on the business at all. Actually, we were collecting cash from the warrant exercise. There's also FX-related losses. So as we note, this is due to the -- this is the lagged impact of the devaluation from the Egyptian pound in 2024.

So what happens is there is certain work that was performed that went into the contract assets or the unbilled revenue. And then this revaluation carried through to now when we recognize it. I would note that the Egyptian pound has strengthened substantially in the last few weeks, so from over 50 to almost 48. So we would expect this effect to be a little bit muted or even turn around in the future. Moving on to the balance sheet items. So we ended the first half with $26.1 million in cash. And subsequent to the close, we mentioned -- as we mentioned, we did an equity offering of $105 million of gross proceeds. So where that leaves us at the moment is we have about $114 million of unrestricted cash, and we have $11.3 million of restricted cash. You'll notice that the restricted cash figure now is much lower than at the end of the first half. So it was about $16 million at the end of the first half.

That is because we had a bid bond or a guarantee that was released. So that returned about $4.9 million. And then going forward, we also expect to see this, the restricted assets drop even further. This is, first of all, due to the release of a customer guarantee to the tune of $2 million to $3 million in the upcoming weeks. And also, we continue our debt paydown strategy. And so we should be able to net about $1 million from paying down a loan facility and getting restricted assets released from that. So where we are at the moment with the debt position is it's $18.1 million at the end of the first half. We're happy because this is down from $21.4 million at the end of 2024. And we just continue to selectively pay down debt where we can release deposits that are tied to the debt. So just to recap for those who may not know this.

So we have a working capital facility. It is secured by 2 things. The first is a property that we own in Taipei. And then additional to the value of the property, we were forced to pledge some restricted deposits. So here's a bank account, here's a deposit, it's locked up, and that is the collateral. As we pay down the debt, then we release the collateral usually on a one-to-one basis, pay down the dollar of debt, release dollar of collateral. So it remains cash neutral for the company, and that's why we pay it down. Overall, we don't want to pay off all of the debt because it's at 3% in dollars. So it's quite cheap and it gives us financial flexibility. A couple of other things to note. The first is that the -- after the equity offering that we did, the shares outstanding right now are 22.9 million. This is basically because we sold treasury shares and issued about 1 million shares in addition to that. One of the advantages to the equity offering, the way we structured it is that we have 3.47 million prefunded warrants, and this is where we have collected almost all of the cash, but we have not issued the shares yet.

And those shares will only be issued when the prefunded warrant holder wants them to be issued. So the share count should stay at 22.9 million until that part starts to change. In terms of the outlook, so the first thing is I want to confirm that the backlog for this year, when we came into the year, it was $93 million. And of course, we've delivered $39 million of revenue. So that is taken out of the backlog. We've added $4 million or $5 million to the backlog. So the backlog remains around $59 million for -- from now until the end of the year. So we are still confident in our guidance for this year of $100 million to $110 million revenue for the total year and then targeting EBITDA margins of 20% plus and also targeting operating cash flow positive with the current contracts and the current structure. So that leaves us on track for full year numbers. You can see from the way that we that we've spoken to in the past, and we will continue to speak to, we don't stick our finger in the air and make guidance that way.

We build it from our backlog, which is confirmed orders, signed contracts that we are either working on or about to implement. We don't sort of look at our pipeline and take a guess. So for the next year, we can confirm that we have a backlog of $70 million. Once we firm up that backlog, then we will get to the market with a more formal guidance. So stay tuned on that front. And then as Jay mentioned, we have several near-term opportunities, which we anticipate making some announcements about in the coming couple of months. So hopefully, that will give you a better idea of the backlog for 2026 and also what the guidance is. One of the things we've talked about in the past, and I want to talk about again today is the funding strategy for future projects. When we do announce those future projects, what are we doing? The first step is obviously to look for project level funding where there is another entity that is friendly to Gorilla or that is an SPV or otherwise, it's a customer that is funding a project, we look for that as a first step.

The second thing is we look for debt. And then third is equity. As you know, we raised equity. So the sequencing was important there. We saw basically a need for equity to do 2 things. The first is to have that ready so that we could say to the customers, yes, we're ready to go. We have cash right here right now, we're ready to start. The second thing is that the availability and the terms that you get for debt improve. So we are now in the market for debt. We have engaged the bank, and we're looking for debt right now. So in the future, I anticipate that we'll be making more announcements about how we fund projects and it will be with an emphasis on project level funding and on debt. With that, I conclude. Jay, unless you have anything else, we can move on to Q&A.

Absolutely. Let's move on to Q&A.

[Operator Instructions] The first question today comes from Mike Latimore with Northland Capital Markets.

All right. Congrats on the strong growth this year so far.

Thank you, Mike.

Jay, maybe can you just highlight or summarize which customers or projects or regions were the main revenue drivers half of the year? And which do you expect to be kind of key to the second half of the year?

Absolutely. So the first half of the year, Mike, we have very actively worked on and in Taiwan. The second half of the year, it will be a majority of -- a lot of the revenue will be coming in from Taiwan, Thailand and Middle East. And for 2026, the mix is almost an even spread between the U.S., Southeast Asia.

Great. Great. So getting nice and diverse sources, it sounds like.

Yes. As we had promised a couple of years ago -- sorry, I apologize, we promised a couple of years ago to derisk our business, not just in terms of territories and geographies, but also in terms of business segments. So that's where we are today. And that we have managed to kind of derisk it.

And then on -- maybe just touch on 2 projects you've highlighted in the past, ONE AMAZON. Can you detail a little bit about when that's going to roll out, how you're going to roll it out in terms of the number of sensors and when? And just a little more clarity on that would be great.

Absolutely. This is going to be slightly long hold on -- horses there. Now for us it has been progressing very strongly, okay? In fact, it's been a real success story for us, even pre-implementation. Now the milestones we have, one will be the official showcase at the New York Climate Week in September of 2025. And that's where the world leaders are gathering and they'll be talking about the ONE AMAZON project. The second one will be the tokenization completion and launch at COP30. That will be in November of 2025 alongside the official release of the ONE AMAZON tokens as well.

On the technology side, we already -- we've got our team in Taiwan and in India, working on all the sensor technology, whether it's field deployment, environmental monitoring, IoT devices, configuring them for forest health, biodiversity tracking and an anti-deforesting alerts. We've also now actively engaged on our POCs on the satellite mapping. So multilayer imaging, creating AI-based land use mapping operations, enabling real-time monitoring and verification. The Internet of Forest, which is the third part of our technology solution is providing the connectivity, the edge AI, the cloud analytics to capture and process environmental data at scale. We've already started working very closely with the university to democratize some of the data. I was in India until yesterday, just got back this morning. We are now signing up with a very large university, one of the top-tier universities in the country so that we can build the innovation lab and absolutely make sure that we are able to help build large language and small language models in the region.

And then finally, we've also started on the cost per hectare analysis. The model is fully operational, where basically what we're doing is we're working to optimize the resource allocation and the project ROI. On the blockchain and tokenization, we're currently working on the platform, building platform, which is built in play in partnership with the leading blockchain infrastructure providers. We're also working on carbon credits and environmental asset tracking, which is directly linked to the on-the-ground data from the sensors as well. So what we have done now is we have deployed some of the sensors, not only just in the Amazon and rainforest, but in other regions just to do a compare and contrast. The one good news I can add to that is that we have officially now signed the land use agreement. So we have a little over 130,000 hectares signed by the state of Mato Grosso. And they will be the one -- one of the -- I think the Governor of Mato Grosso will actually be launching it at the New York Climate Week as well.

This allows us to now go to the other territories with the conversation to close the under negotiation, secure footprint for the large-scale conservation and restoration. Now our role, Mike, is very clear. We are the exclusive technology backbone for data capture and that takes all of the connectivity, security and the system integration. But more importantly, we want to make sure that ONE AMAZON is a measurable, verifiable and a commercially viable climate tech initiative. I hope that answers your question.

Yes. Excellent. Excellent. And I guess just last one for me. The Smart School program in Thailand, maybe can you provide a sort of quick update there? And once that starts getting deployed, what kind of revenue might you be able to see in the first year?

Sure. Mike, we are currently in very, very deep negotiations with the government. The project, as I mentioned previously, has already expanded in scope. It's not just the smart education, there is a smart cloud infrastructure as well as there is the database integration project, the AI database integration project as well at the same time. We are in active discussion both in terms of scoping with the customer and agreeing on some of the contractual terms as well.

So I want to be a little careful so that I don't comment on any specific details such as the commercial model, delivery schedule and so on. But the size and scope of the project has only expanded, not reduced. When there's a formal contract and a public announcement, we will definitely share the details over the course of the next few weeks.

The next question comes from Brian Kinstlinger with Alliance Global Partners.

This is Kevin for Brian. Could you provide an update or a little bit more of an update on any of the large MOUs that you've discussed and the progress of signing contracts? And while you've had a few MOUs, is there one do you think is closest to getting signed? And if so, which one?

Sure. I mean, Brian, the Wan Hai Port in Taiwan and the ADE were both on the MOU phase. We closed them already. As you know, Wan Hai, we will be deploying our AI port logistics safety and operational efficiencies on the port over the next few months. On the ADE, that's a far more complex project. That will integrate our AI-based analytics to track and disrupt financial crime networks. It's the first of its kind, which we are building, especially for the blockchain platform. The remaining contracts we are working on currently are in the final stages, and we will announce once they are signed. We are on plan. And just to be blunt, closing multimillion multiyear AI infrastructure contracts with governments, especially, is not a same-day exercise.

So the MOUs, which we talked about, we are at a very mature phase. I can give you an example for -- we talked about the project in Thailand previously, the one with the Thai Police. That project, we have actually deployed and completed the proof of concepts already. The customer is extremely happy with our results. And if anybody outside of the market today took some time to look, they would see actually our solutions running live in multiple locations, including Pattaya, Chiang Mai, Ayutthaya, Lopburi and so on and so forth. So the opportunity remains, and we are currently engaged once we converted these proof of concepts into contracts, these will turn into what we call broader national programs as well. And more importantly, we are still sticking to our commitment that this will turn out to be a $50 million to $60 million project. I hope that answers your question.

If I could add a couple of points as well. Kevin. Just to add 2 more things. So the first is that not all projects that Gorilla undertakes have the same life cycle. So some it goes through a very lengthy procedure of we discuss the initial terms, we sign an MOU, we go through a proof of concept that sometimes can take months to refine and execute properly. And then we expand that into a formal contract. So like the system that Jay was describing, -- some of them, however, it skips over some of those steps, and it just -- you start talking about an idea and it goes straight into the contracting phase. Some of the opportunities that we alluded to earlier in the call are like that. So there is no MOU that we skipped over that phase, and we're just talking about final signed contracts at the end of the day.

The other thing I would note is that the time lines -- one of the reasons we're so cautious about how we forecast revenue, why I'm always talking about backlog instead of sort of our finger in the air forecast is because the time lines can shift, something that is a proof of concept can take longer, maybe it gets reworked. And like Jay mentioned, in a couple of projects, the scope has actually expanded, so we're happy to have the project take a little bit longer in exchange for a larger scope. But that just makes it very difficult to forecast properly, and that's why we err on the side of being conservative. So where I'm going with this is when we do MOUs, it's the start of a relationship. It's a relationship that takes time to cultivate and then to flourish as business, and we don't try to force it. We try to let it take its own time and focus on the business relationship. And then if it takes a little bit longer, we want to make sure that the market is not getting overly excited overly early. Instead, we message the market when it's mature.

Great. And then could you talk a little bit more about the primary uses of the capital raise? Will there be any significant increases in expenses that can help drive top line growth or near-term M&A opportunities? Or is it just to kind of have a solid cash balance that makes winning new contracts easier given your financial positioning?

I can take that, if you want, Bruce. We raised about $105 million, Brian, because we were moving forward on some very large projects. We want to make sure that we can hit our ambitious targets without -- and without the right capital, we're just not being realistic. I mean I'll give you an example, government asked us to put in a bond, a bid bond -- a cash-based bid bond for a very large project, which was -- that alone was like $20 million. So we don't want to get hamstrung. That's one. Secondly, we're not raising money for the sake of raising it. Every dollar we raised right now to date is tied to a very clear high-return opportunity. And whilst equity was the right move at the time, we always want to make sure that we are looking at debt and other strategic funding structures as well so that we can minimize dilution while maximizing growth.

Now in terms of our growth, today, we are very actively engaged in, as you know, with CNS and CAN. That said, we are also actively engaged or looking at opportunities in India, currently, where we are looking at about 500 -- actually about between 750 to 2,000 people center to help grow very quickly. And we're also actively potentially pursuing an acquisition in the United States as well. Apart from that, all the projects which we are working on are pretty strategic. We have a whole mix of new R&D products that are coming in. So we will be investing some of the investments into our SD-WAN, which is our Intelligent Network Director product. We're working very closely with NVIDIA. We're building quite a number of -- we're co-engineering a number of these solutions and for the ONE AMAZON as well. And so you will see quite a few developments over the next few months.

The next question comes from John Roy with Water Tower Research.

Great. First of all, congratulations on a great first half. I wanted to ask about gross margins. Obviously, they tend to be down. Bruce, maybe you can give us some color on when that might stabilize in the future? Or is that unlikely?

Well, first of all, the gross margins, as I mentioned, in the first half of last year and the first half of this year is influenced really by the mix -- of the revenue mix. So last year, we had a couple of large projects in Taiwan and the Middle East, which were really primarily service and software, so higher margin, whereas in the first half of this year, there were significantly more hardware deliveries in that mix, which as part of filling one contract, which took the margins down. I would say that for the year, we expect the margins to move up towards the target that we announced given the mix.

So as Jay was talking about with some of the contracts that we have announced and are working on. So in the Middle East, in Taiwan and Thailand, et cetera, other places, we expect that mix to bring it to 40% gross margin for the year and then looking forward, we expect, given the current contract mix, we expect a similar margin profile in the future for the full year. Given that these are governments, the timing can kind of shift around, the timing of the recognition of revenue for hardware or for services can move around. So any one quarter might be volatile. But over the full year, they should be stabilized and hopefully, over the next few years, drifting up. Does that help?

No, that definitely help. No, Go ahead, Jay.

Sorry, just to add to that, I think Bruce made a very valid point, right? We've already moved from a very lumpy milestone-driven revenue model to a more predictable model. If you look at the last 2 quarters and the next 2 quarters, it will be more predictable. But more importantly, what we are trying to do is we're trying to move away from these lumpy projects itself to long-term multiyear sustainable revenues, which means we're signing multiyear projects. Now what will happen over a period of time, where we're trading our ship right now, we will see the effect of that towards the latter half of this year or latter quarter of this year and the first 2 quarters of next year.

Whilst there will be some revenue spikes and some of the spikes in gross margins and so over a period of time, what you need to look at is the yearly number at the end of the day. The yearly number will be much more managed, less volatile, and we will have more visibility with a much more stronger baseline for growth, and we'll be capturing all the upside from all these wins as well at the same time. So just to give you an example, the projects we're talking about in Southeast Asia, in Thailand, we've got projects in Singapore, got projects in Jakarta, Malaysia and in Taiwan. These are all 3-, 5-, 8-year contracts. And these are not just maintenance contracts. These are proper long-term multiyear recurring contracts. That will allow us to -- and those will be more stable as opposed to lumpy as well. Just wanted to add that there.

That's really helpful. And one quick question on your U.S. efforts. I know you were talking about possible acquisition. Are you still working with AECOM significantly in the U.S.

Yes, yes, we are. I mean, for us, it's AECOM, Cisco, ONE AMAZON, of course, which is now moving its tokenization strategy to the United States just FYI, will be amazing. But more importantly, we will also be working very closely with the likes of HPE, whom we signed a global OEM relationship with and with NVIDIA in the near future as well.

This concludes our question-and-answer session. I'd like to turn the conference back over for any closing remarks.

Thank you very much. Some questions which you probably need answering, but I'm happy to respond to people who are sending us messages at any given point of time. What I wanted to let people know is that our business is moving forward in what we call as real-world implementation. We are managing country risk, sovereign risk, procurement risk, implementation risk and making sure that we can get paid on time and can deliver on time. That is actually something I think most of you have seen today that our customers are paying us. They're not just holding their money back. Our largest customer has already paid us this quarter, as you've seen from the press release this morning. But what we are making sure also is that we reduce our overall accounts receivable and make sure that we're able to run a complex global organization.

For a company of our size, it's very unique that we are positioned in so many different countries. But at the same time, we also want to make sure that our cash conversion stays on the money, no pun intended. Ensuring payments flowing in line with the project milestones is very essential for us for maintaining liquidity and funding expansion. What we are doing is that we are having a multi-sourcing, multi-localization procurement program. But at the same time, we're making sure that strict payment protection and contractual safeguards are also put in place. I mean, guys, we're dealing with government. It always slips. So we want to make sure that before we make any major capital outlays, we ensure that we are protected and ensure our cash flow.

But the reality is, we all know that sometimes executions can slip. We also know that design of our contracts and some of the operational plans to take those risks off the table before they become a problem. But what we are doing is we're still delivering growth in a very volatile global market today. And I would really appreciate all your patience, and I'm really thankful for everyone being very supportive of Gorilla. Thank you very much indeed.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Well, everyone, welcome to today's fireside chat with Gorilla Technology. I'm your host, John Roy. I cover technology companies at Water Tower Research. And today, I'm joined by Jay Chandan, he's the CEO of Gorilla Technology, along with Bruce Bower, the CFO.

Hi, guys, how are you doing?

Very well, thank you, John. Thank you for having us.

I should mention that Gorilla's safe harbor statements can be found on their website. So with that, welcome, and let's get started.

So Bruce, maybe you can give us the highlights of the strong first quarter of '25 and maybe some key takeaways.

Sure. Thanks, John. So first quarter for us was a real banger of a quarter. I think the top line was the first thing we'd like to highlight where it was $18.3 million, that was up 100% year-over-year. Second thing was the profitability. We are happy with all of the metrics. So adjusted EBITDA reached $5.16 million, and that was up significantly from last year, where it was $3.5 million, that's about 47% increase. And similarly, adjusted net income was $4.47 million, up about 46.7%. This also means an adjusted EPS of $0.23 per share. So first of all, that's a turnaround from a negative number, and we're quite happy with that as a per share number.

A couple of other things I'd like to highlight was -- first of all, would be, first of all, at the end of the first quarter, we saw $33.8 million cash balance. That is broken down between $20.8 million in unrestricted cash and then the balance in restricted cash, which is used for either customer guarantees or deposits that are pledged against certain bank facilities. But overall, a very, very strong cash haul.

The last thing I'd like to highlight would be that we reduced debt. So at the end of the year was $21.4 million, and now it's down to about -- at the end of the first quarter, it's down to about $18.4 million. For us, it's a really strong testament to the growth in the business that we can grow the business and we can keep cash high. At the same time, we're reducing debt.

And one of the reasons why is because the debt have deposits pledged against it. And basically, we're able to pay off the debt, some of the principal and then release the deposit that's trapped against it. So net-net, it doesn't affect the unrestricted cash balance.

The last thing I would highlight is that on a reported basis, there were some one-off losses. Those were driven mostly by the conversion of warrants. So we have private warrants outstanding as part of a financing we had done in 2023 and 2024. Almost all of those warrants are expired. So I don't expect to see those financing-related losses continue or repeat. So that was the first quarter and hopefully onwards and upwards with the other quarters of this year.

Great. No, that's really interesting. Now I know you focused a lot on the profitability and improving the balance sheet. Can you give us some color on maybe milestones or steps you might be taking in the future? What's your focus there?

The focus there is still to be very capital efficient and very focused on -- it's holding the purse strings tight when it comes to cash. The second thing is the way we drive profitability is through existing and through new projects, keeping a very disciplined metrics that we target. So the first thing is, in the past, we are looking at 35% to 40% gross margins for new projects. Now it's 40% to 45% is the yardstick. As the business has grown, as sort of people come to us instead of us doing outreach, we've been able to tighten that up. And I hope that in a year or 2, I can report it's 45% to 50% is the gross margin target. But we're going to keep dragging that upwards.

The second is, as a function of the higher gross margin, we're also looking at a higher EBITDA margin. So this year we're targeting 20% to 25% EBITDA margins. This is a function of 2 things: one, the higher gross profit, as I mentioned. But second is that there is some operating leverage in the business. A lot of the senior people are already in place. And then there is an element of efficiency already. So we don't need to hire wads of people in order to service double the revenue. There would only be a few key hires and then several support roles.

The other thing is that in a lot of the growth markets for us, we've been adding headcount already in anticipation of growth. So for instance, in India, we've added a lot of R&D and customer success roles. And then in Egypt and then also in Taiwan -- sorry, in Thailand, we've announced an acquisition where that will bring us about 70 people overall. So we have the teams in place to really service a much larger growth and revenue base, and thus, that will flow through to higher EBITDA margins over time.

If I may add to that, one of the things we're also changing of the business is changing quite significantly for us is the way we are structuring our long-term contracts. When we go to long-term contracts with customers, we're not just talking about 3-year deals. We're now talking about 3-year deals plus 2-year maintenance and warranties. We're also changing the way we operate as a business. We're going from OpEx-led deals to CapEx-led deals. Sorry, my apologies. From CapEx-led deals to OpEx-led deals. So for example, data centers, where we might do better because we're not just the landlord collecting rent, but we're actually giving them the servers, the AI platforms and so on and so forth so that they can actually pay us a fee for a much longer duration.

So for example, we're currently working on some data center projects where we're actually talking to them about 11-, 12-year deals. And these would typically have been CapEx deals where the customer comes and funds it in a onetime go, we would have maintained it for about a couple of years, done a build operate transfer in about 3 years. Now we have extended the life of that to about 10 to 12 years. And once you sunk your teeth in the customer, guess what, he's not moving anywhere. So we're not just kind of in the business of building what I call multibillion-dollar projects for the sake of building it, but we're actually making sure that we actually hold those margins as well over a longer period of time.

Great. No, that makes sense. And in reference to getting ready for growth, you guys recently did, what, $105 million raise. Maybe you can give us some insights and color on that, whatever you could say.

Sure. So we raised $105 million in July. And really, that was done as an equity raise, but that had several advantages. The first is that we had about 1.45 million shares in treasury that we were able to sell. So the overall number of shares that we issued to do this transaction was 1.1 million shares. The balance of that is in prefunded warrants where we have received the cash or 99.8% of the cash, but the shares have yet to be issued. So over time, those shares will be issued, we expect. But right now, they haven't been issued. So that is a good way of keeping the outstanding share count under control.

With that capital, we expect a few things. The first is that we have an enormous pipeline and some of it is very near dated. We're talking coming months. So we wanted to make sure that we had the capital in place where we could perform on any contracts that we anticipate being awarded or signing. And it wasn't -- I'll get to this later, but we have debt term sheets in place, but we didn't want to take the completion risk on those.

And then the other thing is that for raising funding later in the form of debt or project level financing, it helps to have the equity in place on the balance sheet. So instead of waiting to raise equity later, we raised it upfront. Now the focus is really going to be on funding projects through project level finance, and raising debt at the company level or at a project level. As I mentioned, we have term sheets on the table for up to $200 million of debt or preferred equity, which functions like debt. And the goal really is to use that to fund the next leg of growth.

With respect to the project level finance, Jay will talk a little bit about ONE AMAZON. But, ONE AMAZON, we anticipate raising a funding round there that is significant, which will be one of the project level funding sources with collaboration or strategic partnership with [ Terstrata ], that is going to be another project level. And then, of course, we're in discussions with many parties such as development banks for project level finance as well. So that is not an idle discussion. That is something we've -- I think we've already delivered on, and then we're going to continue to work on.

Sounds good. And speaking of what's coming up, Jay, maybe you can give us a little bit more of a view into what you see coming in '25 and maybe anything you see happening in '26 and beyond?

That's my book. It's a book I keep every day with me, and I keep writing on it. Every single time I meet a customer, this is what I put out there. I mean, I'm sorry, I couldn't help it because it was literally sitting on my table. But listen, look, the outlook for '25 and '26 is probably the most exciting it's ever been for Gorilla. We're standing at what I think is the cusp of a major inflection point. Now over the past 12 months or maybe even 15, we put in the hard, hard, hard yards as they call it, and we've built the pipeline. We've raised the capital. We've hired the heavy hitters. We've secured the tech stack. We've built our products and perfected our products. We've built partnerships with the likes of HP NVIDIA. We are in the process of building some very large significant POCs. And we've deepened our local teams across, I mean, Thailand, India, Latin America, Taipei and now soon in Miami, we'll be opening up an office along with our ONE AMAZON team as well.

Now this -- it's about converting all of that into execution for us. For 2025, you're going to see a shift from us being primarily in final negotiations and contract structuring to actually signing and delivering these multiyear multi-jurisdictional contracts. We've roughly got about $1.3 billion of potential projects we target to close by the mid of next year. And that's culminating from our $5.6 billion pipeline, which will probably grow even further before the end of this year.

And with a long tail of revenues, which I talked to you about previously of between 3- and 15-year contracts. And that's foundational. It means that we are locking in cash flows that are going to anchor Gorilla's growth well into the next decade as well. So we're not thinking about '25 and '26, we're thinking '27 to '30, what happens next.

Now operationally, 2025 is also when ONE AMAZON will start generating revenues, our first revenues, and which is going to be significant because not only does that open up entirely new category for us, it helps build our AI-driven environmental intelligence whilst we are talking about recurring revenue streams being tied into biodiversity, carbon credits, tokenized natural assets and so on. Now that itself could actually redefine how people think of our business going forward.

Moving into '26, for me, I see Gorilla evolving even more clearly into what we've been positioning for, not just as a tech solutions vendor, but as an AI native infrastructure operator. By then, we will have had multiple multi-jurisdiction contracts. We would have built multiple sovereign data centers, either construction or underway. We will have had long-term OpEx contracts with these customers because we're now starting to move from the CapEx to the OpEx model with these governments and enterprises. And these are -- by the way, these enterprises have been starved of budgets in the past. So they're looking at us as their white knight. And we're building environmental platforms that are actually monetizing natural assets at scale. So if you look at the foundation for me, I call it rock solid.

We talked about the cash. We've got a little over $100 million -- $108 million in cash, very low interest debt of about under $16 million today, another $150 million to $200 million in potential non-dilutive financing. We can draw down the cash as and when it's needed. This means that we're going from what we call a massive ramp-up with a balance to actually a very structured support system, which means we're no longer dancing at the edge waiting for money to come in. We've got the money, and we're just waiting to build on the successes which we're going to be signing over the next few quarters.

And culturally, which I think is also as important, we have built a global team, and that's truly genuinely world-class today. Whether it's people like Satish who come from Cognizant or Bala, who came from SRM and Cognizant or people like Nam, who came from SRM as well, and Jackie, who came from our partner Lanner, who has just joined us about 2 weeks ago, and dozens of local hires right from Taipei to Cairo, we're not just sending in consultants, we're actually building local leadership who will own these markets long term for us as well.

So in short, John, 2025-2026, expect Gorilla to go from signing these mega contracts to delivering them at scale. But at the same time, with healthy gross margins, and that's going to be our mantra, multiyear, multi-jurisdiction revenue streams that are fundamentally transforming the business. That's what I believe is going to happen to us over the next couple of years. And I'll keep this book with me all the time.

Well, that sounds great. Unfortunately, we're going to have to leave it there. We're about out of time. Jay, Bruce, thanks so much for joining us today's fireside chat.

To learn more about Gorilla Technology, please visit their website or access our research on WTR's website, that's www.watertowerresearch.com. Thank you, everyone, for joining us.

Now the views expressed in this fireside chat may not necessarily affect the views of Water Tower Research LLC and are provided for informational purposes only. This fireside chat may not be distributed or reproduced without written consent of Water Tower Research and should not be considered research or recommendation. WTR is an Investor Relations firm, not a licensed broker, broker-dealer market maker, investment banker, underwriter or investment provider. Additional disclaimers can be found at watertowerresearch.com.

Hello, everyone. This is Craig Brelsford with RedChip Companies. Thank you for joining today's event with Gorilla Technology Group which trades on the NASDAQ under the ticker [ GRRR ]. With us today, we have Jay Chandan, Chairman of the Board and CEO of Gorilla Technology Group; and Bruce Bower. Chief Financial Officer. Today's presentation will consist of a business update, followed by a Q&A segment.

Before we begin, please allow me to read the safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results along with other statements about the future expectations, beliefs, goals, plans or prospects expressed by management constitute forward-looking statements. Of course, forward-looking statements involve risks and uncertainties.

I now turn the webinar over to Jay and Bruce. Please go ahead.

Thank you very much, Craig. Thank you, everyone, for joining us today. First of all, I thought I'll give you a quick business update, followed by some Q&A from analysts and all the questions you've already sent in.

First part of the update. Over the past quarter, we have seen Gorilla truly hit its stride. We're executing across multiple fronts, from our smart cities to critical infrastructure projects in Southeast Asia, to break through environmental intelligence initiatives in Latin America, to new security developments in the Middle East.

Now our pivot to an appliance-led AI infrastructure model is gaining real traction, where customers are committing to long-term, multiyear, multi-country programs that go far beyond pilots or vanity showcases. This is translating directly into scale, operational leverage and also expanding our EBITDA profile. At the same time, we're also driving down our debt, maintaining a very strong cash position, even as we deliver on ever large projects.

Now all of this points to one very important thing. Gorilla today is positioned not just as a solutions vendor, but also as a strategic partner to governments and enterprises transforming critical national infrastructure.

Now as a strategic business update, our pipeline now stands exceptionally robust at about $5.6 billion across 87 active opportunities. Approximately $1.3 billion of that is targeted [ foreclosure ] by mid of next year. I know a lot of you were asking when we were going to close these deals. I can now tell you that about $1.3 billion is targeted for closure by mid of next year. And these [ are not ] pilots, not speculative engagement. These are large-scale multiyear programs where the shortest contract is actually 3 years, and the longest stretches to about 15 years.

Now we're no longer in early discussions. Today, one of the final stages of negotiation, many of these programs were carefully structuring commercial, technical terms, to underpin years of recurring revenues. Now to give you a sense of immediacy, several major projects in Taiwan and in Thailand are expected to reach signing before the 15th of August 2025, driving us directly into execution.

Now I also want to be very candid both about the market [ that ] we are operating in, along with what we call the globally uncertain climate. Large government contracts, particularly those that are shaping national security infrastructure, education, critical law enforcement, which are going on for half a decade to a decade or more, are inherently complex and are subject to parliamentary and surely cabinet-level reviews. Predicting the exact day these contracts will be signed is neither realistic nor responsible. So what matters is that we are deeply embedded as a strategic partner in these national agendas and we're progressing by the day.

Now at the same time, I also want every shareholder to know this. You are always on the front of our mind, but I also have customers relying on us to deliver national scale outcomes, and employees whose [ carriers ] and livelihoods are tied to these global programs as well. So think of Gorilla leading a 3-pronged stewardship headed by myself. Balanced shareholder value, customer trust, and employee growth to build long-term resilience for Gorilla.

Now at the same time, there's a lot more exciting stuff happening at Gorilla today. We're building incredible caliber of people, we're bringing to drive the next phase of our growth. [ Satish ] you know, has come from [ Cognizant ], [ has ] spent about 30 years there. Nearly [indiscernible] is now driving projects and strategy at a global level. We have [ Jackie ], who's joined us from [ Lennar ] only this week, and he's joined us as [indiscernible] of Asia, and he's going to be running our AI and international markets, spearheading growth across not just Taiwan, but all across Asia. And then finally, we [ had Bala ], who spent about 25 years in HR, especially from [ Cognizant ] and he's going to build our people engine across different continents.

Now a lot of questions have come on where are we with our smart city, our education, our health care initiatives? What's happening on our projects in [ MENA ] and so on and so forth. Let me provide you an update.

Now on smart education, we're in the final stages of commercial negotiation for a massive smart education rollout in Thailand. Now this -- it's very important because this is about educating 6.5 million students. Now think about it this way. This is the first phase of a multiyear, multi-decade program. This is a complete digital learning and a safety ecosystem expected to anchor significant multiyear revenues for us.

On our smart hospitals, our consortium for smart hospitals in Thailand is advancing well. We are currently finalizing detailed commercial models and where integrated technology moves that merges with our AI infrastructure with operational security systems. And then finally, a lot of you have asked me about the smart grid projects. This is one of the largest national energy initiatives in this country and in Asia today. [ We're at the POC ] stages, after which we will advance into technical and commercial discussions with further meaningful developments, which will occur as and when, and I will provide you an update on a regular basis.

Now a lot of you have also asked me on ONE AMAZON. Now I'm very, very pleased to say that ONE AMAZON has progressed massively over the past quarter. We will officially launch the platform at New York Climate Week this September with our first tokenized environmental assets ready to roll out by [ COP 30 ] in November. We are closing final funding [ brands ] with some of the largest institutions and banks in the world as well as some sovereign wealth funds who have expressed tremendous amounts of interest to back this. And at the same time, we're also building the proof of concept to see how we can complete baseline mapping of hundreds of thousands of hectares. And we're also laying critical groundwork with state governments, which means we are now actively signing, or have signed up already, in a few of the states out of the 9 countries where we are actually going to be deploying our technologies.

At the same time, [ Raj's ] R&D team is pushing very hard to finalize the AI systems for carbon and biodiversity verification. We're also racing to deploy both satellite and ground sensor networks. For our initial POCs ahead of the [ COP 30 ], this is not just a quick turnaround project, but we are building credible, scalable and definitely scientifically robust environmental platform that takes time, but we're moving at lightning speed today.

Importantly, we will also expect to start seeing revenues flow in from the fourth quarter of this year, marking the beginning of what we believe will be a long-term, recurring stream tied to verifiable environmental impact. This is not just a strategic win for Gorilla. It positions us right at the forefront of how natural assets will be measured and monetized in the future.

Now others have also asked me about our updates on [ HPE ] and NVIDIA. We recently met with our HPE senior management. What we have done is to reinforce our strategic alignment. And as a result, we are now actively advancing on several large-scale initiatives together. This includes secure data centers, AI appliances, fully integrated infrastructure platforms for both governments and enterprise clients. But partnering with [ HP ] also gives us world-class hardware and enterprise credibility that accelerates trust, especially on projects that are tied up to national infrastructure.

At the same time, I'm very, very, very proud to be a solutions provider for NVIDIA, leveraging their cutting-edge GPU and AI frameworks. We spent a lot of time last week with them at their San Jose premises. This was a significant advantage for us purely because we -- as we roll out into video analytics, deep learning models and large-scale orchestration, it's exactly what we needed to build out our ambitious platform.

Now taken together, these partnerships are also very critical for us to prepare and develop, which we are planning to build across 9 countries in the Amazonian world. We're also going to be launching a hyperscaler to host a lot of the satellite data so that we can have the environmental intelligence data sitting in the United States.

Now this ecosystem is backed by [ HP's ] robust infrastructure capabilities and NVIDIA's AI leadership, ensuring that we have unmatched compute power, power resilience, AI-based acceleration, and more importantly, we can do everything from climate processing to sovereign security workloads. We're in a very differentiated position that our -- that very few can actually in the market claim today, putting us at the center of what we call next-generation AI and digital infrastructure.

The final piece of update, which I'm super happy, and I'm incredibly excited to report, is that we have now formally launched the funds which we have been in discussion with. A lot of you had seen the press releases of us working with Brazil, [indiscernible] and so on, that has actually been renamed, firstly, into [ Terrata ]. And I'm also very happy to report we now at [indiscernible] actually have deployed about $3.5 billion in assets, along with a substantial cash position. These resources are earmarked to drive scale on hard infrastructure projects across Latin America and the United States, where we have already been engaged on environmental intelligence, data centers and smart security initiatives.

The second fund, where I'm on the board of both by the way, has recently secured a $1 billion term sheet from a very prominent high net worth individual. And on top of that, we're also in final stages of closing a term sheet for another $1 billion from a private capital investment. And that takes [ out ] to our second fund to about $2 billion, and these will be used to do strategic deployments across Southeast Asia, East Asia, Latin America, Middle East and the United States.

Why are we doing this? We are seeing critical infrastructure opportunities where governments and enterprises desperately need our solutions. Now whether it's smart cities, whether it's sovereign data centers, whether it's next-generation policy, environmental intelligence, or smart education, smart hospitals. But the problem is they often lack immediate capital budgets.

What we are doing, we are going to use these vehicles, which I've already announced previously, we are now going to step in and structure these projects as long-term OpEx models instead of an upfront CapEx burden. This makes it very, very attractive. I'll give you an example.

Take a data center, for example. Across Southeast Asia or Latin America, or even in the United States, we're seeing governments urgently needing to secure data center capabilities so that they can host the sensitive workloads, including sovereign data centers and so on and so forth. Right from managing their digital IDs, their public hill, the video surveillance data, climate data and so on and so forth, these governments have multibillion dollar upfront budget needs.

Now from us coming in, we're able to go in and say, we will help you with your CapEx problem. We will help you deploy our resources to build, own and operate these infrastructures, which we're going to take care of. And more importantly, we are transforming your CapEx and OpEx model into a predictable OpEx solution for 15- to 20-year agreements. This gives immediate secure infrastructure, and more importantly, without the fiscal shock while locking Gorilla into a recurring revenue base.

Now we're also in advanced engagements in key provinces -- in one key province in the United States, as well as we're also very active in conversations in potentially deploying some of this capital at a transformational infrastructure project as well. So keep your eyes and ears [indiscernible] purely because this, we believe, is a master stroke for Gorilla. It allows us to transform where customers have urgent needs but have very limited budgets, unlocking multibillion-dollar infrastructure rollouts, and more importantly, giving Gorilla the long-term contracts that directly underpin our top line, but also help with our EBITDA and net income. It also positions us not just as a technology partner, but as a critical AI infrastructure owner and operator, fundamentally embedding Gorilla into the digital and operational framework of entire countries.

Now at the end of the day, we're doing this all for our shareholders, although the value creation here is massive. We are making sure that we can finally execute on infrastructure visions that have long struggled to fund. And more importantly, we will also be working very, very closely for our employees who will drive and maintain these critical infrastructure for decades.

So the next evolution for Gorilla is fully integrated technology infrastructure and being the capital powerhouse as well.

I'm going to transfer the line to Bruce, who can take it from there and give you an update on the financial side of it. Bruce?

Thank you, Jay. Craig, if you could turn on my video, or let me turn on the video. So you all heard the update from Jay. I think one of the things he didn't discuss, and I'm sure it's on the tip of all your tongues, that you [ won't ] discussed is Gorilla did a recent fund -- completed [ our ] fund raise recently. We raised $105 million. So I'm going to talk about that first.

So first question, of course, is people said, why did we do this? Well, the very simple answer is that we have a pipeline, as you heard, of projects that -- it's a fully loaded pipeline. And we want to realize it and start signing things in the coming weeks. So in order to do that, we had two considerations.

The first is that the amount of capital that we would need to deliver on all of those contracts that we thought are signable in the next couple of months. We would need much more than we had on the balance sheet at the moment.

The second thing is also the timing. A couple of the contracts that we were talking about, the time lines accelerated, and it became clear that while we had -- debt went up, and I'll talk about that in a second, the debt would not complete in time for us to realistically take on a project. And so faced with that, we said, okay, it's better to raise equity so that we can sign confidently a project, deliver on it, and then further -- more projects come up in the pipeline, we can execute on.

So the first thing I'll talk about is how we fund the business. So in the past few months, we've laid out a very clear discussion about funding. We have -- for the projects that were already in the pipeline, and the projects are already signed, we had adequate funding. What happened is some projects became more -- became larger in terms of capital needs and that became shorter dated. I think that -- while I can't go into all the details now, I think that the next 3 months will vindicate this decision from Gorilla's part, as you'll see exactly what we're up to and what these funds will be used for.

The second thing is that we've outlined how we're committed to, first of all, looking for project level funding. And then secondly, for debt financing. And thirdly, if needed, equity funding. And I think Jay's [indiscernible] force about our partnerships with Amazon, and then [ TeraStata ] and others gives you a very good overview of the fact that there is -- we have lined up plenty of project level financing already. So the funds from [indiscernible] and from on Amazon, while they're not exclusively used for Gorilla. Gorilla is obviously a partner to those projects and those will be used at that level to fund those projects to which Gorilla will participate. So I think that we have accomplished our mission in terms of lining up project level financing. And of course, for projects in the future, we will continue to look for project level financing.

The second thing is in terms of debt. So we have secured term sheets from lenders and a range of debt for up to $200 million. These are terms that we're quite satisfied with. I wouldn't say it's 3% interest rate or anything, but it is terms that are satisfactory to the Board and to the management team.

As I mentioned though, the time line to complete on these is not a couple of weeks, like an equity fund raise would have been. It is several months, given the nature of all the legal work with contracts and then [ sorting ] up the legals on the debt after that. So that is why we felt comfortable raising equity because first of all, the equity enables us to get into the projects, which makes the debt even easier to get in terms of availability, in terms of pricing and service as well, because we'll have cash flow to do it. But the other thing is that this gives us the confidence now to [ plow ] forward with -- as soon as we have the contracts signed, we can go forward with them because we know that we have further funding available.

So I think that the capital structure, the way that we go through looking for funding, that has not changed. I think the only thing that people are perhaps surprised by is that we did raise equity sooner than they had anticipated. I think for the reasons that I mentioned, and also given what we expect in the next couple of months, that decision will be proven to be the right decision.

One of the things I wanted to highlight is that the deal structure that we did was actually quite protective of shareholders. So first of all, Gorilla had about 20.6 million shares outstanding as we went into the offering. We sold 1.45 million treasury shares, which we had accumulated over the last 12 months. And then we issued about 1.05 million shares. So those were freshly issued shares.

The rest of this deal consisted of prefunded warrants, where the investor has given us the cash, but we have not issued the shares. Instead, basically, the investor has prepaid by giving us the full cash considered -- almost the full cash consideration on the warrants, but they hold just a warrant so they have the right to issue shares later. It's at their discretion, but that means that about 3.5 million shares that could have hit the market have yet to hit the market, and will not hit the market for some time, because the investor would only basically issue those shares when they need to sell them. So I think that actually this -- the structure of this offering should prove protective of shareholders. And let's just say that we are very happy with how this worked out.

One of the questions is who are the investors in this offering? They were not -- their names were not disclosed in the press release. They have asked us not to disclose it. So we're not going to be offering their name up. If they change their mind, then we'll be -- we'll be happy to share that at that time. All I can say is that it's a very -- the main investor is a very well-respected fundamental investor. So it's -- there is some speculation that's a sovereign wealth fund or something like that. It is not. It is a fundamental portfolio investor, which is very well respected.

Now one of the upshots of this is that our balance sheet is [ modified ]. So we have now [ $108 million ] of total cash on the balance sheet as of today. Some of this has already been used as performance bonds, bid bonds, et cetera, to secure some of the contracts that we have in the pipeline in the near term. And then also, we have plenty of free cash, over $80 million, that we can use for uses, for instance, participating in more bids. Participate -- putting up guarantees for projects that we win and then funding the performance on those contracts.

We also have about $16.5 million of debt on the balance sheet. As I've mentioned before, this has been coming down over the last few months in a gradual fashion. The debt is at 3% interest rate in dollars. So it's actually quite favorable terms. So we're not going to turn around and pay it off tomorrow, because if [ we're to ] borrow more, it would be at higher rates. So we will likely gradually decrease it over time, but still expect to have some debt on the balance sheet over the coming months.

The one catalyst I see to repay our debt is we have a building in Taiwan, which is still in the market. We've recently revised the price. So we expect a little more activity there. And if that building is sold, because the building is pledged to the loan, then I would expect the loan will be [ rebated ] then.

A couple more questions that have come up, and I just wanted to be in front of. First is when will we report results for the first half? We're targeting the middle of August. That could slip by a couple of days here, or either sooner or later, but in that time frame.

And then the last thing is people have asked what are we going to do with the balance sheet in the future? Well, first of all, I've outlined the way we think about it. We look for project level financing first. Second is we look for raising debt, and third is for raising equity. Given that we just -- we've raised equity, we have debt available. We have -- I would argue we're going to see improved terms on the debt given the [ short up ] balance sheet. All the focus now is on raising debt or preferred equity, which acts similar to that.

This is something where we are engaging a bank, or one or more banks, to help us with arranging and completing this. And then that will be announced if and when we secure contracts and need to announce that. So stay tuned for that, but that is the priority at the moment in terms of funding the business.

Didn't have anything else that I wanted to get in the prepared statements. So Craig, over to you or Jay, if you have anything else to add?

No, nothing at all. I think we should just go into Q&A.

Yes. Thank you, gentlemen. Thank you very much. We are now going to take questions that we received and compiled prior to the webinar.

First question, gentlemen. Why did Gorilla raise equity after stating no further dilution? And will there be further raises in 2025?

Bruce, you want me to just respond to that? I know you just gone through this.

Yes. Yes.

Right. Well, guys, listen, we chose to raise capital via equity simply because we needed to, was a strategic decision to secure a financial firepower and our ambitious pipeline. What happened was a lot of these pipeline projects became bigger. And so we needed the balance sheet, strengthened balance sheet, to support it. And for all the people who just do not understand how government projects work, let me educate you.

Every single project needs a bid bound and a performance bond. And the bid bond is typically 3% to 5%, and the performance bond is between 5% and 7% of the value of the project. So if I am going after a project, which is about $400 million, you could imagine I need to deploy between $20 million and $40 million. So those were absolutely essential, and the time lines actually moved forward very quickly, which I think Bruce touched upon.

From the outset, we've been very clear that we would not pursue equity, okay? But it was only after establishing project level satisfaction and non-dilutive financing, but the problem with debt. As you can understand, it requires a lot more longer process. And when things come in quickly, you will have to work with the sheer velocity and the size of the pipeline, especially across Latin America, the United States, Thailand and Taiwan. Now simply understand, this could not have been done by debt alone, especially with the front-loaded capital demand.

Number two, as for the deal mechanics, as Bruce has already alluded to, we only issued about 1.05 million shares, and the rest was actually paid out about 1.45 million treasury shares. I think that is actually a very smart, prudent move. But more importantly, if you look at it over a period of time, we are very confident that the rapid EBITDA growth will actually drive the value of our stock and will offset any negative impact to debt.

And finally, we are working towards a very well balanced, what we call pipeline today, which is about $5.6 billion. I just committed that we were going to raise -- we were going to close about $1.3 billion of contracts between now and mid of next year. We need the financial [ progress ] to actually deploy these. Again, for all the people who don't understand how our business works and how governments operate, this is very important that you have to have substantial balance sheet. Otherwise, you are not awarded these projects, hence, the fund raise. Craig?

One thing also to add is the performance bonds and the bid bonds are the entry fee. In addition to perform on a contract, so one of the ones that we are looking at, they said you need to deploy $55 million in order to perform on this contract within 2 months. So of course, just to name one opportunity. So that -- yes, I'm not naming any more details about it. But that is the kind of opportunity where you can't just show up with the bid bond the performance bonds and say, oh, don't worry, we'll find the rest, right? They want to see that it's all in place before you're bidding.

And of course, this isn't just one opportunity. There are several opportunities that look like that, where the time lines that we had initially discussed compressed and you, as Gorilla needs to be sure that you have the money in place and go to the customer and say, everything is in place. Otherwise, you put the contract to risk.

Thank you very much, gentlemen. Next question. What is the status of that $50 million influx?

In this case, I think we were talking about in the first half of this year, we are looking to get paid by several customers. So one of the -- so we haven't received $50 million. One of the reasons is that some of the invoices were delayed in terms of when we could issue them and thus, because they haven't been invoiced, they can't be paid. And then of the $25 million or so that was invoiced, we've received about $10 million, and then we're pending receipt of the next $15 million.

So it's a bit of a disappointment. But look, government customers have their own logic. Government customers have their own time lines. And sometimes you just have to be patient.

Could you please clarify the public warrant structure, the reverse split impact and outstanding public warrants?

Yes, and I'm happy to do that. So we have outstanding on the publicly traded warrants. We have, at the end of 2023, we have -- we had 9.58 million warrants. Those went to a reverse split. Sorry. So -- so those went through a reverse split, so it's now 958,000. So the strike price for that basically adjusted is $115 a share. So that is the status of the warrants.

Why has Gorilla not filed [ Form 4s ] or insider trading disclosures?

Gorilla is an FPI. It's a foreign private issuer. So we don't have Form 4s. We have different filing requirements or in this case, we don't have to file Form 4s. We tried to update people about what insiders are doing, both the management team and then related parties. But we don't need to follow the same filing cadence. So we don't -- we're not going to file a Form 4, or we don't need to, or when it's not required of us.

Can Gorilla sustain 40% to 45% gross margins on large projects?

Do you want me to take that, Bruce?

Yes, go ahead. I can see it...

Absolutely, Craig. In fact, we are quite protective of our margins. You might say we got them the way it Gorilla got its troops. The reason we say we can sustain 40% to 45% gross margins, even on very large infrastructure projects is because we own so much of the stack ourselves. We're not at the mercy of some endless chain of subcontractors nibbling away at our economics, okay?

On top of that, with Gorilla now stepping into as the [ owner operator fraud ], things like data centers, we're not just clipping a fee. We're taking the systems integrators fee as well at the same time. We're building recurring revenues on our own turf. And so yes, as the scale goes up, the margins are not squeezed. Quite the opposite, actually. We're finding innovative ways to bulk them up, and I promise you no gym membership required.

What are the margin expectations on new contract?

Look, Craig, if you've been around government contracts and infrastructure projects for long enough, you know that they are very, very good at writing long contracts, and they're very, very slow at paying you a fair margin.

First of all, bad at paying your fair margin [indiscernible] very slow paying at all. But unless you design it very cleverly, we are now moving away from that. We are now on our current negotiations, whether it's smart policy, whether it's national education or sovereign data, we're targeting the 40% to 45% gross margins. But we are also coming in as providing the CapEx for these customers as well.

Now when you look at deals like data centers and so on and so forth, we're not just basically the landlord collecting rent, but we have our own servers, our AI processes instead of the brick and keys as they call. Now broadly speaking, the expectation is our new contracts will keep a very healthy margin. But at the same time, we're also not making sure that we are not going on razor thin margins, effectively we're not a charity.

I think the other thing Jay is that when we have an implementation of a project, there's an installed kind of base of devices and that pay software licenses, et cetera. So long term, that is the support for the gross margins, right? So we expect that to also shore up the margins for the business in the long term.

Next question. When will management issue 2026 guidance? When will you -- yes, that's the question.

Sure. Well, listen, if I had a crystal ball or even better, if our AI could predict to the government signing time lines, I would give you the 2026 guidance right now, [ tattered ] on my forehead, and we would all go home happy, okay?

But the reality is that we want to give you the guidance that's credible, locked in by signed contracts and not some [ PowerPoint ] fantasy. As we close out on major deals over the next couple of quarters, especially with the ONE AMAZON and smart education projects across Asia, we will begin generating significant revenues in Q4. What we will be able to do at that point of time will be in a very strong position to issue multiyear guidances.

The plan is to share that either with our Q4 numbers, or early Q1 results next year. So everyone can see precisely how the next few years will fall, Craig. Until then, I think it's like waiting for -- for a good British pub to open, worth the patience because the pints, but in this case, the cash flows will be flowing in properly.

Thank you very much for that, Jay. Gentlemen, what is the breakdown of the current $5 billion pipeline, please?

It's a good question. So listen, Craig, we've heard this over and over again. In fact, I'm watching some of these guys live on the chat. It's running on my screen right now, talking about fluff and personally [ be rating ] me. You know what, for all these naysayers, I don't care, right? Where pipeline is not some fairytale [indiscernible] up PowerPoint. It's $5.6 billion juggernaut, which we are actually spreading across [indiscernible] really hard dollar opportunities. And again, I'm committing that we have about $1.3 billion of potential projects we will sign between now and second quarter next year.

It is also evenly spread across Southeast Asia, Latin America, Middle East and the U.S. And that gives us a very real geographical balance as well. Again, listen, being a CEO is not easy. It's quite difficult. I think people don't understand that, especially the retailers. Now for me, it is very important to not just balance the business in terms of revenue cash flow, but also very important for me to give a geographical balance, and a vertical balance of each of our technology products as well.

Now my simple message is, when these projects close and the healthy cash flow starts rolling in, I will have the last life. Craig?

Yes. Yes. Thank you, Jay. Proof-of-concept conversion. How -- sorry, have any pilots turned into paying customers?

Yes, they have. Quite a few, actually. These pilots or proof of concepts have been working on for the better part of almost 6 to 8 months now, have actually grown into full-paying customers. They're now picking the dinner check, if I may, it's of just nibbling on free samples. So that's why if you look at how quickly we are moving from even the fundraise, for example, it took a weekend to actually raise that money, is because there's an urgency. We are seeing that our pipeline is precisely moving into long-term potential contracts.

A question about the U.S. government and public sector opportunities. Is that still a focus?

Absolutely. We are currently working on a key province on the East Coast. We're working on some 5G lawful interception solutions for key government agencies in the United States. We're lining up some other sizable U.S. infrastructure deals for the latter half of this year.

Again, Craig, we did not cross an ocean just to do [ PowerPoint ]. So we are working very diligently. But again, it takes time. It takes patience. So we will have a significant announcements coming over the next few months.

Please give us an update on the Southeast Asia smart city government contracts.

Oh, we have -- I think I mentioned this. So in Southeast Asia, we're currently engaged in about 5 or 6 major contracts, out of which two, we hope to sign by mid of August, and the remainder three we're also hoping to get it inked and closed by mid of August as well.

Could you give us an update, please, on the status of that Thai acquisition?

So as we had announced, we are very actively involved in the acquisition and closing it right now. We firmly remain on track to close the acquisition this quarter. The Thai team is already fully operational and demonstrating precisely the local leadership and execution quality with [indiscernible], positioning us very strongly for rapid scale development once the ink is dry.

They've also brought us in -- the company we're acquiring has also brought us in into some very, very significant deals in this region.

Jay and Bruce, are there any other plans for M&A or joint ventures?

Do you want me to take that, Bruce?

Well, I'll say a little bit. I mean we have our hands full, I think, for the next few months with customers and then with getting up to speed with the M&A project in Thailand. One of the advantages that I really wanted to highlight is it comes with a full team of 70 people. So that will get us to rapidly to scale in the Southeast Asia region, right? So we have an office in Taiwan, obviously, but this will also mean that we have two large, very formidable offices, both with an R&D team and then with a team that can do the more customer-facing work.

After that, I think, Jay, you can talk about -- what, if anything...

Well, listen, my short answer is we're always looking out, right? You remember [ ABC ], always be closing. So we are still exploring consortium led place. We have now, potentially through our partners, both [indiscernible] and the private fund, access to more than, what, $15 billion, $20 billion of capital. So we'll have a good deal, especially when it comes to undervalued assets so we can [indiscernible] and scale them equally across.

Thank you, Jay, for coining a new term, [indiscernible]. Final question. Final question. Can you give us an update on legal action status and any tentative settlements?

Okay. That's a very sensitive one. But thank you. As you may have seen, we have passed our case against [indiscernible] in order to pursue settlement negotiations. I can't say much at this time, but those negotiations are almost over. And the result is good for the company.

Great. And as I said, that is it for the questions. Gentlemen, if you have any final remarks, please go ahead.

Can I make a quick statement. There has been a lot of speculation about our NVIDIA partnership. And what we are doing with them, and is that fluff again? And -- let me kind of -- would it be okay, Craig? I gave -- I spent about 30 seconds on this, explaining what we're doing with NVIDIA.

Absolutely, Jay.

Sure. Listen, to everybody listening to this call and people who are not, and will possibly listen to this call afterwards. Partnering NVIDIA for us is a massive accelerator for Gorilla. This is not just about prestige. It's not just another name. We're not one of the 167, whatever numbers you guys have been quoting on different posts. It directly powers our next phase of our infrastructure strategy.

Customer demands have shifted from generic compute to high performance. AI native systems that can handle real-time low latency workloads at the edge, or whether it's smart cities, autonomous logistics, or multi-agency securities. Whether they all need to be rugged, intelligent and more importantly, these appliances need to be processing data on the spot.

Now with NVIDIA's [indiscernible] platform, which is [ Nano ] [indiscernible] [ AGX ], for example, we are engineering exactly that. Compact edge devices that don't just see they decide. Our proprietary IP from multiperson tracking to anomaly detection and complex object recognition, now runs optimized on NVIDIA's accelerated edge compute.

Now this is not a simple model port. We are re-architecting our entire AI pipeline for NVIDIA's compute fabric. It means tighter [ Kuda Kernel ] integration, [ TensorRT ] acceleration and full stack profiling, all translating into faster inference and more effective deployment.

Now it's fundamentally what this does for us is actually strengthening our road map. From Gorilla Intelligent Network Director, and all of you know about our SD-WAN solution, to our new AI video analytics appliance, everything is now designed for a ground-up AI acceleration.

Now for example, there's ONE AMAZON. We are not just drawing pretty satellite maps. We are training biome specific language models on fused satellite, and IoT ground data. NVIDA's GPUs are the only practical way to train and infrared scale. Now their developer ecosystem, for example, and an [ STK ] stack like the [ Deep stream and Triton ] give us a genuine force multiplier. The bottom line for us is that we are shifting Gorilla from a traditional compute to what is called a rocket ship AI native infrastructure faster, smarter, everywhere from edge to cloud. This is how we will stay ahead of customer demand. On the technical conversation and more importantly, turn ideas into operational reality.

So it is not fluff. It is serious Gorilla progress. Thank you very much, Craig.

Thank you very much. For more information on Gorilla technology, please reach us at [ 1800 redchip ] or e-mail us at [email protected]. Please visit the information page created by redchip for Gorilla. It's grrrinfo.com. There, you can view and download the investor presentation and fact sheet, and sign up for news alerts on Gorilla. Finally, joined RedChip's next webinar with [ Fibro Biologics ] today at 4:15 p.m. U.S. Eastern. Register for all Redchip webinars at redchip.com/events where you can also view an archived version of today's webinar with Gorilla.

Thanks again to our many participants today. And thank you, Jay and Bruce.

Thank you, everybody. Take care.

Thank you for standing by. This is the conference operator. Welcome to the Gorilla Technology Group, Inc. Earnings Call for the First Quarter of 2025. [Operator Instructions].

Before we begin, we will read the forward-looking statement. Today's call includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and projections about future events and are subject to known and unknown risks and certainties that could cause actual results to differ materially. Forward-looking statements often include terms such as expects, believes, plans, anticipates, may, should, and similar expressions. For a discussion of important factors that could affect Gorilla's results, please refer to our filings with the SEC, including our most recent annual report on Form 20-F. Except as required by law, Gorilla undertakes no obligation to update or revise any forward-looking statements made on this call, whether as a result of new information, future events or otherwise.

I would now like to turn the conference over to Jay Chandan, Chairman and Chief Executive Officer, and Bruce Bower, Chief Financial Officer. Please go ahead.

Thank you very much, Nick. Well, for everyone who's here today, first of all, welcome to our conference call. I'm delighted you all could join. This has been one of the operationally significant quarters in Gorilla's history. We are expanding across the United States, Latin America, Southeast Asia and East Asia, converting real pipeline into delivery and deepening partnerships with some of the world's most respected institutions.

Gorilla is scaling fast and executing harder. The quarter reflects exactly what we have been building towards, a strong financial performance, global expansion and material progress across smart infrastructure, AI security and national digital systems. What you all are seeing right now is not an early-stage growth. It's a strategic expansion. We're securing projects in ports, airports, data centers, hospitals, education, law enforcement and all of this is now moving from negotiation to execution.

Over the last 2 years, we have made deliberate decision to focus inward, fixing the fundamentals, which is very key for our business, restructuring globally, scaling our delivery capability, hiring the right people and proving above all that we can execute. We are not just a hype-driven company. Whilst others were chasing headlines and inflated projections, we were securing national infrastructure contracts deploying mission-critical systems in the public sector and more importantly, getting our financial house in order. That meant, tightening our operations, rebuilding the teams, pushing through complexity in multiple markets quietly, consistently and without the need for a drumroll.

Now with our revenue up more than 100% year-on-year and with a positive net income and more importantly, with a $5 billion-plus pipeline and real deals being delivered across Southeast Asia, Middle East, North Africa, Latin America and beyond, the results are loud enough or I believe the results are loud enough on their own. We're seeing immense acceleration from Q2, Q3, Q4 going into 2026. And I couldn't be more excited to join you all on this call and let you know that we are positioned for a very strong '26 as well. Bruce, do you want to take them through the numbers on a very high level?

Yes, so I would like to mention a few of the highlights that I'm sure you've seen from the release. So the first is, of course, the revenue of $18.3 million, 109% year-on-year growth. But not only that, we're quite happy with the adjusted EBITDA of $5.16 million, which represents a 48% increase year-on-year. And then the adjusted net income of $4.47 million, which is a 46.7% increase. In total, this means that we're executing well on the contracts, the business that we have, and it's flowing through into profitability.

The other thing I'd like to point out is that the balance sheet remains strong. So the first thing is total cash reserves both restricted and unrestricted closed the quarter at $33.8 million. In addition, we did that while managing to reduce debt. So the debt has dropped from over $20 million at the end of the year to $18.4 million. Subsequent to the close of the quarter, we actually have reduced the debt further to $17 million as of today. We've done that in a cash-neutral fashion, where basically, we have blocked deposits, that are collateralizing the loan. So pay off a $1 of debt, that releases $1 of blocked deposit. So we're very proud of the way that we have managed the balance sheet in this time.

A couple of other things I'd like to point out is, first of all, the cap table. So we ended the first quarter with around 20.15 million -- with less than 20 million shares outstanding, slightly less than 20 million, and now it's a hair over 20 million shares outstanding at 20.15 million. And then the fully diluted share count remains the same because that increase in outstanding shares came due to the exercise of warrants.

The other thing I'd like to point out is that during the quarter, the second quarter. So subsequent to this sort of the earnings release, we spent $1.8 million on share buybacks. So that means that we've spent a total of $5.4 million on the buyback program in the last 12 months. In addition to that, we have a total $10 million program authorized, so that gives us $4.6 million of remaining capacity. We've done all this with the business -- with the balance sheet, while also investing for the future. So Jay, of course, mentioned some of the pipeline and some of the partnerships that we have.

I would like to highlight, first of all, the ONE AMAZON partnership, where in the first quarter, we made a $1.5 million investment. We followed with $3.5 million in the second quarter. So a total commitment of $5 million to secure that long-term partnership. I'm sure Jay can mention more about what's going on in general with that, but we're very happy to have -- to be participating in this partnership in a financial way. At the moment, you can see that, that investment is carried at cost on the balance sheet for the quarter.

One other thing I'd like to point out is the guidance. So the guidance has remained for 2025, the same where it's $100 million to $110 million is the revenue guidance. This is based on a backlog, which is revenue that we have secured in the sense of where we have contracts signed and is either due to be implemented or it's being implemented already. There's a date attached to the revenue. And we expect an EBITDA of $20 million to $25 million based on that revenue number and then a net profit in the range of $15 million to $20 million. Of course, that excludes extraordinary items. So that guidance remains the same.

And then 2026, we are not in a position to issue guidance for the full year, but we can say that the backlog continues to shape up. So it's at $70 million for 2026, and then also, we have several projects that we have talked about, where it's in the proof-of-concept stage and advancing. So we are confident that, that backlog will grow. And then the last thing, as Jay mentioned, that we have over $5 billion in pipeline and qualified leads. The sharp observers will look at that, has actually decreased from earlier in the year, where it was over $6 billion. The reason for that is actually because our MOU with the PEA, the Provincial Electricity Authority in Thailand has moved into proof-of-concept stage. So it's no longer a qualified lead, it's in the proof-of-concept stage. So that's the reason for the drop.

Outside of that, actually, the qualified leads, the amount of sort of contracts -- potential contract value attached to them, grew.

And then one other thing, not quantitative, but I'd like to talk about the funding. So as you can tell, we have a strong balance sheet, fortress-like in terms of cash balance, both restricted and unrestricted cash and also the debt that continues to reduce. The funding that we have on the balance sheet now is enough to tackle the projects that we have signed already, and it's enough to tackle what we envision as the projects that we we'll be signing shortly.

If we were to sign more projects that need funding, then we would first look for project level funding. Second would be debt or debt-like instruments and only then maybe would we look for equity. But I'd just like to emphasize that we're very confident in the balance sheet that we have and our ability to take on new projects without -- first of all, hopefully, without having to raise outside funding. And if we do have to raise outside funding, Jay and I remain committed to protecting shareholders.

That -- those are the main points for me. Back to you, Jay, or over to the moderator.

Nick, I'm happy to take questions so that we can respond -- get some more time and respond more diligently to all the questions, both the analysts and the shareholders may have.

[Operator Instructions] Your first question today will come from Brian Kinstlinger with Alliance Global Partners.

Nice results. I'm hoping we can dig -- I thought I heard your comment that helped clarify, but I want to make sure I understand. For the Royal Thai Tourist Police contract that you had, originally talked about $50 million to $60 million. Can you remind us, is this a signed purchase order? Did you just say you were going into POC? And just maybe I'd like to hash out if details have already been completed or where you are in that process?

Brian, first of all, thanks for joining in. The Royal Thai project has actually exceeded our expectations. We started out with a simple proof-of-concept. And as I'm not sure if you've seen the National Daily actually put out a press release, it was not us. This is the National Daily put out a press release about Gorilla and recommending our AI surveillance system. What we've helped them do as soon as we kind of finished the proof of concept was to apprehend a little more than 200 suspects every week, which has been a real success.

Now that, for me, in a real world speaks for itself. Now we are closely working with their leadership to expand and deepen the platform capabilities nationwide. So we have now been asked to actually work on a multitude of projects because of the success of this. And as you can see tourism is growing quite significantly, in Thailand, they've gone from having 32 million tourists to 43 million tourists this year. What we are doing is we are now integrating the Royal Thai Police with the -- Royal Thai Tourist Police with the immigration, working with the AOT. And finally, we are going to be working with the individual provinces of each of those key islands, including Phuket, Krabi, Similan, James Bond, Ko Phi Phi, Phang Nga Bay and so on and so forth.

What they're asking us to do is not just deploy surveillance systems, but they're also asking us to build connectivity across these key islands. So that they could keep in touch and allow each of these tourists to travel safely across all these islands so that they don't get lost. And this is also helping them connect to the emergency services at any given point of time where they're going to use an RFID tag or their mobile phones, if they're stranded or lost. And that would be Gorilla's technology as well. I hope that answers your question.

It did mostly. I just want to make sure I understood. The $50 million to $60 million that was discussed, is that the total opportunity of the Thai Police and the islands? Is that a signed contract number? Or is that -- just take me through -- I think there's questions about those kinds of things about your contracts. So just take us through what has been signed versus what's the opportunity?

Perfect. So the one that is being signed is to a tune of $50 million to $60 million. What we are now going towards or headed towards is where we've actually got a teaming agreement with them and I can confirm that. That we will be looking at a total size of between $500 million to $550 million for the entirety of the project. But this is spread over 5 to 6 years, just FYI.

That's the addressable opportunity. Got it.

That is addressable opportunity.

Yes. So I've got a few more, I may ask one question and respect and go back in the queue, because I have a few more. Again, talking to -- you put out a lot on different contracts. Can you update us on where you are with that large $400 million opportunity for the smart education contracts, I believe that was MOU and we're 6 months down the road. What's the progress you're making on a formal agreement?

So Brian, I understand it's been a little over 6 months, but let me tell you, the world has been in turmoil and all governments have been shaking every single day, as you can imagine. So decisions have been very complicated. Political situations have been also very complicated, but that did not stop us from pushing. We've been pushing. And I'm very happy to report that we're in the late stage negotiation process on actually 2 of the projects -- of the education projects. One is for smart education. And on top of that, they've just added a little nugget which is another $80-plus million for Smart Cloud Infrastructure for the same educational project as well.

As I mentioned, it's -- we are working to get their support, their final support, both of which are very transformative. And if you give me a few more days, maybe a couple of weeks -- 3 to 4 weeks I will be able to give you a more concrete solid update by then. But I can tell you that we are literally in the last stage right now as we speak.

Don't commit to weeks. When it happens, it happens. You'll update us thank you, and I'll get back in the queue and ask two more when I'm back.

If I just chip in one thing. So when we announced an initial MOU or something along those lines with clients, that's usually based on the proposal that we've made, all sides understand the proposal, the scope, et cetera, and we move forward on that basis. But governments when it's dealing with critical national infrastructure and security, they don't just say, let's go and do everything all at once. There's usually a proof-of-concept phase. We test it. We make sure that everything works as planned. The economics are as planned, et cetera. and then it moves into a rollout phase where it's more copy paste and scale over.

So typically, when we announce an agreement like this, for instance, with the Royal Thai Tourist Police, the initial scope, we have to go through a proof-of-concept phase that takes months and for a larger opportunity may even take 1 year or more. And the whole purpose of that is to make sure it works properly, and then it moves into a binding agreement where all sides are happy with the scope, who's going to do, what time frames, what milestones, billing cycles, et cetera. So the timing may be a little frustrating for investors where things take longer than they would like, but that's the only way that it's going to happen.

[Operator Instructions] And your next question today will come from John Roy with Water Tower Research.

I was curious as to what definitive steps you're taking to sustain the growth? Obviously, this kind of growth is amazing, but it's difficult to continue. I was wondering if you could give us some color as to the steps you're taking to continue the growth?

John, great question. Good to hear from you. So there are 5 to 6 key steps we are taking today. First of all, as you know, we've built a strong foundation. We're scaling towards what we call position. First step, we're converting pipeline into revenue. Now we have a very significant qualified pipeline. What we are doing in Q2 and Q3 is we're laser focused on converting these large deals, which are a late-stage negotiation. Bruce touched upon it. It is frustrating for shareholders. It is frustrating for us, but we have not lost sight. These are across public safety, education, energy in regions such as Southeast Asia, Latin America, Middle East, North Africa and the United States. And this is not just pipeline for the sake of PR, as many have alluded to, it is active progressing and tied to national outcomes.

Second, we are very actively working across major deployments in the progress. For example, we are now entering into multiyear contracts, none of our contracts, none of our contracts are 1-year contracts. The minimum is 3, 5, I think, the average is about 7 to 10 now is what we're looking at. So what we are doing is we're working with national stakeholders to get them to understand the difference between an OpEx model and a CapEx model, making sure that these deployments will show up meaningfully for Gorilla at the same time, not just in Q2, Q3 and Q4, but '26, '27 and '28. We are looking at new markets and new partnerships. That's number three. That's our foot #3 or prong #3.

We are -- we expect to announce new market entry including further expansion into the regions I just mentioned. But at the same time, we're also advancing our discussions with very well-known household name partners, typically around energy, AI, hardware integration, and these alliances were only helping us scale faster whilst we maintain a capital discipline.

The fourth most important approach, is our financial discipline. We could be going out willy-nilly and spending a lot of money trying to bring growth. But what we are focused on is profitable growth. We're not chasing it purely because at any cost, but more importantly, what we are doing, we're scaling with structure. What is important to us, margin, EBITDA, cash flow, they remain core to our KPI.

The fifth most important point is we are keeping a very keen eye on media and market visibility. We are making sure that investors are taking note, they're starting to pay attention to Gorilla. With earnings, new partnerships, global projects in motion, we hope that Q2 and Q3 will be more a period of increased exposure and momentum building.

And last, to round it off, John. We're also pursuing strategic acquisition in Southeast Asia. We are finalizing currently on an acquisition in Thailand that will allow us to get operational depth and local scale. This will allow us to consolidate regional operations and turn Gorilla into a dominant AI infrastructure player, not just in Thailand but also across the entire ASEAN region. We expect to close that sometime in Q2 and begin the integration in Q3. I hope that answers your question.

Yes, does a great job. Maybe this is one for Bruce as a follow-up. I mean what is the state of your pipeline or backlog? And maybe if you could give us some color on what is in that and what is not in that, if you know what I mean?

Without going into specific contracts, I would say that in 2025 the guidance is -- we have $93 million of backlog for this year. That is almost entirely due to existing contracts and clients. And then that's three large clients and then the several sort of smaller ones. For next year, we count the backlog at $70 million so far. That is a couple of existing clients, and then that is several smaller new or new contracts that start at the end of 2025, but most of the financial benefit hits in 2026.

Your next question today will come from Mike Latimore with Northland Capital Markets.

This is [ Aditya ] on behalf of Michael Latimore. So could you give some color on if you expect sequential revenue growth each quarter this year? And also some color on the gross margins?

Did you say sequential revenue...

Sequential revenue growth. Yes.

Bruce, do you want to take that?

Yes. So our guidance is for the full year. We don't guide to any particular quarter. And that's just because some of the government clients and sometimes the timing could slip by a week or something. So we don't want to risk the quarter by saying that every quarter will be a stair step up. But it's obvious from the full year guidance compared to the first quarter that the second half will be stronger than the first half in terms of top line.

In terms of gross margin, we guide to 40% to 45% for this year. Jay mentioned about our financial discipline and I think that's a very good point. So the first is that we have basically a cutoff for new projects of 40%. The other thing is that given the scale of the number of qualified leads and the number of new opportunities that are coming our way every day is we're basically tightening up the terms that we accept. So like Jay mentioned, in terms of margins, in terms of length of contract duration, et cetera, the nature of the mix we're trying to be much more disciplined. So the aim is to drift -- is to see the margin -- the gross margin drifts higher over the next 2 to 3 years, hopefully, towards closer to 45% to 50% range.

Got it. And what is the current headcount? And what might that be by the year-end?

Great question. So we're currently north of about 200 plus. Those are full-time employees, contractors will be a little over 100. With the acquisition closing, we'll be at about 300 full-time employees. By the end of this year, we should be between 300 to 400 full-time employees and probably between 100 to 200 contractors. As you can see, [ Aditya ] we've been hiring quite significantly in India, Egypt and in Thailand. And what we are going to do is scale for growth.

And your next question today is coming from Brian Kinstlinger with Alliance Global Partners with a follow up.

Three quick questions. The first on the Amazon contract. You've spent $5 million in terms of you said of investments. What is it that you're investing? Where is that money going towards? And how much more investment is needed?

Bruce, do you want to talk about the agreement and then...

Yes. So we have a SAFE agreement. We're basically ONE AMAZON, which is the company that does two things. We have an equity stake in that. So for those not familiar, SAFE means a Simple Agreement for Future Equity. So when they do a priced funding round, that is the moment in which we are issued equity. But right now, this is a contract that will guarantee as equity in that event. So ONE AMAZON -- Jay will go into more detail, but basically, this is not in the token. This is in the parent company that manages the token and also the impact investments. So it's the top co.

Okay, so that gives you financial interest, got it.

It does -- and that's why they got Gorilla on Board of the company as well. So the ONE AMAZON project, as you may know, it's a 30-year project for environmental monitoring across the Amazon Basin, right? On the capital side, we are in deep, deep discussions with leading family offices, institutional investors and development banks across U.S. and Latin America. This is not just an environmental data project is what we're calling it is a new financial framework for valuing and protecting nature -- natural capital using real-time AI-driven intelligence. Now the reason why we've been very active and what we are doing right now is three things.

One, we are working with strategic partners and creating a global validation. So as you know, we have partners such as AECOM, Goldman Sachs, MIT, [indiscernible] Media Labs and so on and what we are doing is that we're expecting this alliance to become a gold standard for climate-aligned finance. Now if you look at the second aspect of the ONE AMAZON, we are actively engaged in evaluating the deployment of our own constellation of low orbit satellite so that we can provide sovereign environmental intelligence over the Amazon itself, relating overpriced third-party services and putting us in control of our own data economy. Okay?

This is important because this would mean that Gorilla along with ONE AMAZON will launch its own low-orbit satellite. So we are actively looking at whether we purchase these satellites or actually, we buy the company itself. That's number two.

Third. What we are also doing is actually, we're building a model where we're not just talking about deploying value for the token, we're actually creating value for the data that is being generated. So what are we doing today? We're working very closely with companies who are potentially going to be investing into ecotourism, renewable energy, agroforestry, biodiversity, credit monetization and so on and so forth. And as I mentioned previously, Brian, 25% of the funds of every dollar raised is going towards Gorilla for technology deployment, and we're well positioned to create both, increasing the intrinsic token value and long-term recurring data revenue. And as I've mentioned, this is putting us in control of our own data economy. I hope that answers your question.

It does. My last two-part question for Bruce, I think it's a numbers question. First, the gross margin in the quarter was about 500 points below your target. I assume that's more hardware deliveries and that the remainder of the year will be less weighted towards hardware. That's my first question. Is that true? Or is that what you're thinking?

And then second, on the cash flow, you would have been cash flow positive, but you've got this large unbilled receivable, a very large outflow. Maybe just speak to that and how that might reverse itself, so you'll be generating cash for the remainder of the year maybe?

Yes. So on the first one, that is absolutely correct. So there was a disproportionate amount of hardware more than sort of what we expect for the full year in the mix in the first quarter, and that is what -- that's one of the reasons. The second thing is that in terms of the overall margins for the company is first quarter is usually the slowest. So in terms of business -- and we also carry higher SG&A costs. So there's usually 13 months in Taiwan. There's usually some other kind of costs at the same time, activity is slower. So yes, those are the two reasons why the margins both, gross and the EBITDA margins would be a little bit weaker in the first quarter, and we expect that to normalize over the full year. Like I mentioned, we target the full year, not an individual quarter because things can move around.

And then second, to your second question, I'm sorry, I'm blanking on it ...

You have an $18 million outflow for unbilled. So I assume your -- you haven't invoiced yet, but maybe just take us through the dynamics of that in collections.

Yes. So there are two components to it. So one is what we need to build and the second is what we need to collect. So in the second quarter so far, we haven't so far, we haven't raised any new invoices or substantial new invoices. We will do that in the remaining 2 weeks, and then we have collected on the receivables that were there. We've collected about $7 million on the receivables that were there at the -- $5 million on the receivables and $2 million was release of the guarantee. The receivables that were there in the end of the first quarter. So the cash is moving in the right direction. And then basically, we are we're collecting on some of the other receivables. We anticipate collecting them either before the end of June or in July. It is trending in the right direction.

The $18 million outflow you didn't invoice yet for -- to some of your customers for your work. Is that right?

That's correct. So we didn't really invoice in the first quarter. And then the second thing is that we performed a lot of work or we deliver a lot of goods. So that's why.

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you, Nick. Everybody who's listening and shareholders, and I've been awfully quiet and that's with a purpose. It has been a phenomenal period of momentum and expansion for Gorilla. As I've mentioned to Brian and the rest of the team, John and so on, we are scaling rapidly. We're currently engaged in projects across infrastructure, ports, seaports, data centers and so on. We're expanding very rapidly across Asia. And as I mentioned, we're in the final contracting stages for quite a number of projects. ONE AMAZON project is moving forward at a pace. We are really, really kicking it out there.

As you all know, we've also recently signed an OEM agreement with Hewlett Packard Enterprise. This is not a logo partnership, as many have alluded to. It's an operational venture. I'm actually meeting with their CEO and all of the senior leadership next week in Las Vegas, where we'll be showing Gorilla's full stack to their global partners. This also marks a major leap in our global scale-up strategy and validates our strength of technology and execution, unlike others may lead you to believe.

We are also actively very engaged in scaling up our core intelligence platform. For example, we didn't talk about it. But we have been actively engaged with our current -- one of our current large clients in scaling up their 5G lawful interception in Taiwan. And being an existing customer and moving to the next phase of deployment, we're also in active discussions to introduce the same solution in the Middle East for where there's a high demand, especially now for secure, high integrity 5G interception infrastructure, which is growing very quickly.

So across the regions and sectors, Gorilla is no longer just participating, we are absolutely leading. And the reason I've been quiet is not because of some reports. I've been quite because I've been working, I've been pushing the boundaries and we're all coming together to make sure that we're able to deliver success to our customers and to our stakeholders. That is my only objective. Now we are solving national problems with speed, precision and confidence. But more importantly, this next phase of growth is all about converting that momentum into lasting infrastructure and long-term impact. So thank you for -- thank you all for believing in us. Thank you for believing in me and we will make this happen. This is just the beginning. Thank you once again, everybody.

This concludes today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.